Sadara Chemical Halts Production Amid Supply Chain Disruptions and Wider Financial Losses
Sadara Chemical Company, a joint venture of Saudi Aramco and Dow, has temporarily ceased production at its Jubail plant, citing persistent supply chain disruptions exacerbated by the ongoing Middle East conflict. This shutdown comes as the company reported a significantly wider net loss of SAR5.79 billion for 2025, a substantial increase from SAR4.15 billion in 2024. Reduced sales volumes, lower prices, and operational issues contributed to a 14.8% revenue decline, intensifying pressure on Gulf petrochemical producers.
Sadara Chemical Company, a prominent joint venture between Saudi oil giant Aramco and US chemicals firm Dow, has announced a temporary halt in production at its parent-operated facility in Jubail. The decision stems from persistent supply chain disruptions, which have been significantly intensified by the ongoing geopolitical conflict involving Iran, the US, and Israel across the Middle East. This regional instability has severely impacted the movement of feedstock and finished products, while also heightening risks to critical industrial infrastructure.The shutdown was officially disclosed in a regulatory filing by Sadara Basic Services, the entity responsible for issuing Islamic bonds for the parent company. This development places increased pressure on petrochemical producers throughout the Gulf region, whose operations are heavily reliant on intricate regional logistics networks and export routes.Financially, Sadara Chemical had already reported a substantial deterioration in its performance for 2025, recording a wider net loss of SAR5.79 billion ($1.54 billion), a significant increase from SAR4.15 billion ($1.1 billion) in 2024. Revenue for the 12-month period ending December 31, 2025, plummeted by 14.8% to SAR9.87 billion, primarily driven by reduced sales volumes resulting from unplanned operational events and extended maintenance activities that disrupted production schedules. Furthermore, lower average selling prices across its product portfolio contributed to the revenue decline, culminating in a total comprehensive loss of SAR6.12 billion. The company also experienced a deepening gross loss to SAR2.56 billion and an expanded operating loss of SAR2.87 billion, with higher fixed costs linked to operational disruptions and maintenance further squeezing profit margins. The current production suspension is expected to compound these existing financial challenges.
