Packaging Costs Set to Rise as Oil and Energy Markets Shift

Recent geopolitical tensions are driving volatility in oil and energy prices, with potential knock-on effects for plastics, paper packaging, and global freight costs.

Industry Update: Oil and Energy Volatility is Starting to Move Packaging Costs

Recent geopolitical developments are beginning to influence several key raw materials used across the packaging sector. The biggest shift right now is coming from global oil and energy markets following the recent conflict involving Iran.

After a prolonged period of relative stability, rising energy prices are beginning to ripple through plastics manufacturing, paper production and international logistics.

Below is what we’re currently seeing, what it could mean for packaging costs in the coming months and how Lindum Packaging is positioned to support continuity of supply.

oil-barrels-packaging-materials-plastic-film-cardboard-boxes

Energy and Oil Costs – The Main Driver

Oil and energy are currently the most significant factors influencing global packaging markets.

Global crude oil prices have risen sharply in recent weeks, with Brent crude exceeding $100 per barrel for the first time since 2022 and briefly reaching levels above $110–$119 as markets react to supply risks in the Middle East.

That matters because energy sits underneath a large portion of packaging manufacturing costs across plastics, paper and transport.

Industrial Plastic Film Extrusion Machine Producing Stretch Film Rolls

What It Means for Plastic Packaging

Plastic packaging is directly exposed to oil movements because common polymer resins such as LLDPE, LDPE, PP and PET are derived from petrochemical feedstocks.

Within many flexible packaging products:

LLDPE: Can represent approximately 70–75% of total material cost.
Energy: Typically accounts for 8–12% of manufacturing costs.
Feedstock pricing: Polymer producers may begin adjusting pricing as costs move through the supply chain.

As feedstock and production costs rise, film manufacturers across the industry are beginning to signal potential price increases.

Paper Based Packaging – Energy Intensity Still Matters

Paper manufacturing is also highly energy intensive. For many paper mills, energy represents 15–25% of total production costs.

When energy markets become volatile, paper production costs can quickly follow.

Energy demand: Paper mills require significant electricity and heat during production.
Market sensitivity: Paper pricing often reacts quickly to energy price fluctuations.
Industry impact: Rising costs may influence packaging pricing across the wider market.

Large paper manufacturing mill producing giant paper rolls with conveyor systems for packaging production

Freight and Logistics – Fuel is Feeding Through

Higher fuel prices are also beginning to push international transport costs upward.

Marine fuel and diesel prices track crude oil closely, meaning the recent oil price spike is already affecting global shipping and road transport.

Shipping routes: Several global routes have reported freight increases of 80–200%.
Container transport: Rising bunker fuel costs are pushing container rates upward.
Road logistics: Diesel price increases are influencing domestic transport costs.

Supply Security – Lindum’s Position

Despite the uncertainty across global markets, Lindum Packaging remains well positioned to support customers.

Our hybrid supply chain combines UK manufacturing with globally sourced production to ensure stable and flexible packaging supply.

Dual sourcing: Every product is supported by multiple manufacturing partners.
UK production: In-house manufacturing in Lincolnshire provides supply resilience.
Global partners: Six trusted international suppliers strengthen continuity.
Strategic inventory: Strong stock levels help mitigate disruption.