Jim Ratcliffe's Ineos is getting a much-needed debt break as the Iran war disrupts global petrochemical supply chains. The company's €15.5 billion ($18 billion) debt burden is easing as investors bet that earnings will benefit from supply disruptions caused by the Strait of Hormuz closure. Bonds of Ineos Group Holdings have rallied sharply, rising from a low of 82.6 cents this year to 93.3 cents for April 2029 maturities.

Pressure on the highly-leveraged chemicals empire had intensified in recent months as Chinese competition depressed prices. Bond prices had tumbled from around par in late October to near or below 80 cents on the euro, a level many investors consider signals financial distress. The debt began recovering earlier this year when EU authorities promised to crack down on Chinese imports, and now the Middle East conflict is providing another boost.

Analysts say Ineos stands to gain from higher demand and margins as Asian chemical companies face severe disruption. About a third of global naphtha trade transits the Strait of Hormuz, with most volumes going to Asia. Ineos' North American operations should benefit most from the turmoil, with costs little changed thanks to low US ethane gas prices while earnings benefit from the global spike in margins. Other parts of the company remain under pressure, however, with some Ineos Quattro division bonds still trading around the 80-cent mark.