International methanol supply has faced disruptions across multiple regions in 2026, with overseas production declining significantly year on year. Supply constraints have become increasingly evident as unplanned shutdowns, reduced operating rates, geopolitical conflicts, and logistical disruptions continue to affect major production regions.

Overseas Methanol Production Falls 17.17%

According to Longzhong International, overseas methanol production excluding China reached 27.8864 million tons as of the end of August 2026, down 5.7809 million tons, or 17.17%, from 33.6673 million tons during the same period last year.

The decline in international methanol supply has not been limited to production facilities in the Persian Gulf. Several methanol plants outside the Middle East have also experienced unexpected shutdowns, maintenance, and reduced operating rates.

The combination of production losses and transportation disruptions has resulted in a much tighter global supply balance than previously anticipated.

Middle East Disruptions Become the Key Supply Risk

The Middle East has been at the center of the global methanol supply disruption in 2026.

Iran experienced a complete production shutdown during the first US-Iran conflict in mid-June 2025. However, no significant damage was reported to methanol plants or major public infrastructure. Following the rapid end of the conflict, production quickly recovered and shipments resumed.

Before Iran implemented winter gas restrictions in late 2025, producers accelerated shipments and transferred inventories to China. This contributed to exceptionally high monthly methanol imports and elevated port inventories in China during the second half of 2025.

The situation changed dramatically in late February 2026 when the US-Iran conflict escalated again. Following the blockade of the Strait of Hormuz, shipping activity came to a virtual standstill. Storage facilities became increasingly congested, floating storage volumes increased, and attacks on public infrastructure further disrupted regional operations.

As a result, methanol plant operating rates across the Persian Gulf fell sharply. Some Middle Eastern producers outside Iran maintained limited production, while others were forced to reduce rates or suspend operations altogether. Regional operating rates in affected areas fell to approximately 30%–40%.

Strait of Hormuz Disrupts Traditional Supply Expectations

The 2026 market has challenged a long-standing assumption that annual methanol production can serve as a reliable leading indicator of export volumes.

Under normal circumstances, production levels provide an important indication of future international shipping availability. However, the Strait of Hormuz disruption has significantly weakened this relationship.

Large volumes of floating storage, accumulated inventories, and intermittent restarts and shutdowns at major Middle Eastern plants have become less meaningful when transportation through a critical export route is severely restricted.

In other words, the key issue is no longer simply how much methanol can be produced, but how much can actually reach the international market.

Supply Pressure Extends Beyond the Middle East

Production conditions in other regions have also been challenging in 2026.

North America has remained relatively stable compared with other major producing regions. However, several supply disruptions have occurred elsewhere:

• South America: Venezuela underwent maintenance in the first quarter, while Chile experienced routine natural gas restrictions in the second quarter. The Titan plant subsequently shut down in the third quarter due to natural gas supply issues.
• Russia: A major methanol plant experienced an extended shutdown following a drone attack.
• Southeast Asia: Indonesia, Brunei, and New Zealand all underwent major maintenance shutdowns during the first half of the year.
• Malaysia: Methanol production has experienced periodic operational instability and relatively low capacity utilization.

With disruptions occurring across several major producing regions, global methanol operating rates have fallen to seasonally low levels.

Methanol Prices Continue to Strengthen

Against this increasingly constrained supply backdrop, methanol prices have continued to move higher.

Methanol futures once again reached the daily limit-up level, while inland auctions continued to provide upward price support. At the same time, the basis for near-month contracts and spot methanol prices along the coast continued to strengthen.

As of the latest market data, approximately 748,300 tons of methanol had been unloaded from foreign vessels in August.

If there are no further developments affecting shipping conditions in the Taiwan Strait over the next two days, September methanol imports are currently estimated at approximately 360,000–400,000 tons. The final figure remains subject to confirmation of individual vessel schedules.

Outlook: Supply Remains the Key Variable

The methanol market is expected to remain relatively strong in the near term as international supply continues to face multiple constraints.

However, the market has reached a point where downstream demand and price acceptance will become increasingly important.

Market participants should closely monitor whether downstream producers can continue to accept higher methanol prices, as well as whether disruptions to raw material supplies could lead to changes in downstream operating rates.

For the international methanol market, the key question in the coming period will not simply be production recovery, but whether supply can be transported smoothly from producing regions to major consuming markets.