Oil Prices 2025: Powerful Impact on Vietnam's Textile, Plastics, and Logistics Industries

Do you know why a small change in oil prices can make the t-shirt you wear cost several thousand dong more? Fluctuating oil prices have pushed production costs for thousands of Vietnamese businesses up by an average of 10-15%, putting significant pressure on the textile, plastics, and logistics industries.

Mr. Minh, owner of a textile factory in Binh Duong, shares: "Every time oil prices rise, we get headaches calculating how to keep selling prices from going up too high..."

With Brent crude currently fluctuating between $69.21-69.45 per barrel and WTI around $67.3-67.5 per barrel (updated July 22, 2025), plus the EU's 18th sanctions package against Russian oil in July, numerous businesses from textile workshops in Binh Duong to plastic factories in Dong Nai are feeling the "shock" from energy cost volatility.

Following the EU's decision to lower the Russian oil price cap and continued volatility in global energy markets, the ripple effects have reached even Vietnam's manufacturing heartland. The EU's price ceiling mechanism, now set at 15% below global market average (equivalent to around $47.6-48 per barrel), has reshaped global oil pricing dynamics and created new supply chain pressures that Vietnamese manufacturers are experiencing firsthand.

Today, we'll "dissect" each industry to understand clearly why a barrel of oil in international markets directly affects the shirt you buy, the plastic water bottle you drink from, or the delivery time of your online orders.

Textiles: When the "Export King" Faces Difficulties

Direct Energy Costs

Vietnam's textile industry consumes about 15-20% of the country's total industrial electricity (Ministry of Industry and Trade, 2025). When oil prices increase by 10%, electricity costs for textile factories can rise 3-5%, equivalent to 200-400 million VND per month for an average factory with 500 workers.

Specific example: Viet Tien Garment Corporation (VGG) reported in its Q2/2025 financial report that electricity costs increased 12% compared to the same period, mainly due to rising fuel prices for power generation following global oil price fluctuations. This pushed product costs up 2-3%, directly affecting competitiveness against rivals from Bangladesh and Cambodia.

Direct Impact on Consumers

According to statistics from major retail chains, prices for basic cotton t-shirts have increased 3-5% in the first six months of 2025, mainly due to rising production and transportation costs following oil price increases.

Raw Material Supply Chain

Synthetic fibers account for 60% of Vietnam's textile raw materials and depend on imports mainly from China and India. Raw material transportation costs increase 8-12% when oil prices rise sharply, directly impacting final product costs.

Dyeing chemicals produced from petroleum have prices that increase 5-8% following oil price fluctuations and account for 3-4% of total production costs. This forces factories to recalculate everything from raw material procurement to production planning.

Export Impact

Vietnam exported $20.8 billion worth of textiles in the first six months of 2025. When production costs rise but cannot be passed on to customers (due to long-term contracts), business profits decrease 8-15%.

Plastics Manufacturing: The "Stepchild" of Oil Price Volatility

Raw Materials 100% Dependent on Petroleum

Vietnam's plastics industry is almost entirely dependent on oil prices due to the specific nature of raw materials. PE and PP plastics have prices that fluctuate directly with oil prices at a coefficient of 0.8-1.2, meaning when oil prices increase 10%, raw plastics increase 8-12%.

Vietnam imports 85% of raw plastics from China, Thailand, and Malaysia, so transportation costs also fluctuate heavily with fuel prices. This creates "double pressure" for manufacturers who must face both rising raw material prices and high logistics costs.

Case Study: An Phat Xanh Plastics (AAA)

In its Q2/2025 financial report, AAA stated:

• Raw material costs increased 18% compared to Q1 (corresponding to the oil price increase cycle)
• Product costs had to increase 12-15%
• Orders decreased 8% as customers switched to cheaper suppliers from Indonesia

"We're like playing a chess game where the rules constantly change," said Mr. Le Quan, deputy general director of a plastic factory in Dong Nai. "Raw plastic prices fluctuate with oil prices weekly, making customer quotations difficult."

Impact on Retail Prices

500ml plastic water bottles at supermarkets have increased from 3,000-3,500 VND to 3,200-3,800 VND in the past six months. Plastic bags and packaging have also increased 5-8%, directly affecting daily living costs.

Final Products Comprehensively Affected