Iran's Sole MDI and TDI Producer Karoon Hit by Israeli Missile Strike!

On June 8, 2026, local time, Israeli missiles struck the Karoon petrochemical complex in Iran's Mahshahr Petrochemical Special Economic Zone, located in southwestern Iran, causing partial damage to one of the country's key industrial chemical facilities. No casualties were reported, but the attack marks an escalation in the already tense conflict between Israel and Iran, directly targeting infrastructure critical to Iran's overall economy. Reports indicate that chlorine-related units and storage facilities within the Karoon complex were damaged.

The attack occurred around 7:30 a.m. local time on June 8, 2026, when two missiles hit parts of the facility. After the attack, all personnel within the Mahshahr Petrochemical Special Economic Zone were evacuated.

The Karoon petrochemical complex is operated by Karoon Petrochemical Company, Iran's sole producer of isocyanates. Its products include toluene diisocyanate (TDI) and diphenylmethane diisocyanate (MDI). These products are chemical building blocks for polyurethane foams, coatings, and adhesives, widely used in products ranging from automotive seating to construction insulation materials.

Karoon Petrochemical Company has a total isocyanate capacity of 80,000 tons/year, with MDI and TDI each at 40,000 tons/year. The company also produces other petrochemical products such as hydrochloric acid, nitric acid, ortho-tolylenediamine, meta-tolylenediamine, nitrobenzene, and aniline.

The Israeli military has confirmed that it struck multiple locations within Iran's Mahshahr Petrochemical Special Economic Zone. Similar Israeli strikes on Iranian military and industrial facilities occurred in April 2026, and this round represents a clear escalation. Each round of strikes targets infrastructure that Israel claims is linked to Iran's missile capabilities, while Iran characterizes the attacks as unprovoked aggression against civilian economic assets. The Mahshahr Petrochemical Zone is located in Iran's oil-rich Khuzestan province, which borders Iraq.

Israel Cites Links to Iranian Military Activity

Karoon Petrochemical Company is part of the Persian Gulf Petrochemical Industries Company (PGPIC), Iran's largest petrochemical holding group.

The United States sanctioned PGPIC and dozens of its affiliated companies in 2019, stating that the group generated billions of dollars in revenue used to fund Iran's Islamic Revolutionary Guard Corps (IRGC) and the Khatam al-Anbiya Central Headquarters.

According to the U.S. Treasury Department, PGPIC subsidiaries cooperate with the Khatam al-Anbiya Central Headquarters through engineering, construction, and financing contracts worth hundreds of millions of dollars, and revenues from the petrochemical industry are a significant source of funding for IRGC military activities.

The products of petrochemical facilities are primarily civilian-oriented, but some can be used for military purposes. Compounds produced in the Mahshahr Petrochemical Zone and other petrochemical hubs can serve as precursors for missile propellants and other related components.

In previous military actions against industrial facilities in Iran's Mahshahr Petrochemical Zone, Israel stated that facilities in the area were involved in producing materials required for Iran's missile program.

On June 8, 2026, Israeli military officials said one of their objectives was to destroy infrastructure used to produce critical raw materials for ballistic missiles. The dual-use nature of petrochemical production means that such facilities can both support civilian industry and supply materials that may be diverted for military applications.

Karoon Petrochemical Company is one of the most important suppliers to Iran's civilian manufacturing sector. It is Iran's sole producer of isocyanates, a key raw material for polyurethane materials. Its MDI and TDI products are the foundation for numerous industrial and consumer products, including building insulation, adhesives, coatings, automotive parts, footwear, furniture, and household appliances.

MDI and TDI Production in the Middle East Nearly Completely Paralyzed

Notably, in addition to the missile strike on Karoon Petrochemical Company, Sadara, another major MDI and TDI producer in the Middle East, confirmed on March 31, 2026, that its integrated production complex in Jubail, Saudi Arabia, had been temporarily shut down due to ongoing supply chain disruptions. At the time, Sadara said it could not estimate when production would resume, and any restart would depend on domestic and international developments.

Sadara is a joint venture between Saudi Arabia's state-owned oil giant Aramco and U.S. chemical company Dow, and is a major producer of polyurethane raw materials in the Middle East. The Sadara integrated complex in Jubail, Saudi Arabia, represents an investment of approximately $20 billion and is designed to produce about 3 million tons per year of plastics and specialty chemicals.

According to public disclosures, Sadara's Jubail integrated complex has an annual ethylene capacity of 1.5 million tons, propylene capacity of 400,000 tons, and produces 750,000 tons/year of LLDPE/HDPE, 350,000 tons/year of LDPE, 330,000 tons/year of propylene oxide, 360,000 tons/year of ethylene oxide, and 400,000 tons/year of polyether polyols. The complex also has TDI capacity of 200,000 tons/year and MDI capacity of 400,000 tons/year.

In early March 2026, Iran threatened to launch missile strikes on the petrochemical joint venture. Subsequently, in the early hours of April 7, 2026, an explosion occurred at Saudi Arabia's Jubail Industrial City in the northeast, resulting from a large-scale strike. According to a Saudi Defense Ministry statement on April 7, 2026, Saudi forces intercepted and destroyed seven ballistic missiles fired toward the eastern part of the country, but the statement did not identify the party that launched the missiles. The attack on Jubail Industrial City adds further uncertainty to the future resumption of production and supply at Sadara's integrated complex.

Since the outbreak of the US-Israel-Iran geopolitical conflict, large petrochemical complexes have increasingly become targets of attack. Petrochemical production facilities such as those at Karoon and Sadara underpin local industrial self-sufficiency, exports, and employment. In wartime, however, the areas where these large petrochemical complexes are located are perceived to have close financial ties to military activities and to be engaged in producing dual-use materials.

The missile strike on the Karoon petrochemical complex, combined with the ongoing shutdown of Sadara's integrated complex, means that MDI and TDI production in the Middle East has been almost completely paralyzed.