US chemical stocks are rallying as the war with Iran drives up oil prices and tightens global supply chains. Brent crude has jumped 14% in five days due to disruptions in Iran's oil production and the Strait of Hormuz, boosting petrochemical companies like Dow Inc. and LyondellBasell Industries NV. LyondellBasell shares climbed 5.6% to their highest level since July, while Dow gained 4.3%.

The conflict has disrupted about 15% of global ethylene and polyethylene supply, pushing prices higher across the sector. This comes after a prolonged industry downturn that forced companies like LyondellBasell to slash dividends by 50% in February. The S&P 500 Chemicals Index rose 0.6% amid the volatility, reflecting renewed investor interest in the battered sector.

Fertilizer companies including The Mosaic Company and Nutrien Ltd. could also benefit, as 35% of global fertilizer raw materials transit through the Strait of Hormuz. Analysts say North American and Russian suppliers may gain market share if Middle East supplies remain disrupted. While the duration of the conflict remains uncertain, even a few weeks of disruption could create supply constraints lasting several quarters, potentially reversing the industry's recent struggles.