Ask Jim | Sir Jim Ratcliffe answers questions about INEOS and its businesses. April 2026

Yeah. The impact so far is it's pushed prices up and margins up. That's been good all round for INEOS. The reason prices have gone up is simply because a lot of capacity has been trapped inside the Straits of Hormuz, because obviously Saudi has a lot of base capacity in there for plastics and chemicals. That's all trapped — it's about probably 20% of the world capacity. But also slightly more subtle: oil and gas are the raw materials for petrochemicals. For a cracker you've got liquids crackers, gas crackers, and China depends particularly on the Middle East for its chemical raw materials. 60% of the naphtha for China's liquids crackers come from the Middle East, so that's trapped. What's happened around the world is a lot of petrochemical facilities are running half rates or are closed down because they can't get the raw materials. That has tightened the markets, and we're seeing prices and margins going up everywhere. We also have an oil and gas business, and of course the oil and gas business is in heaven at the moment because everything's gone through the roof. Whereas in chemicals the prices have gone up but also the raw material costs have gone up because our raw materials are oil or gas. But in the oil and gas world the raw materials haven't gone up. So pretty good all round so far.

Looking into the future, that's more difficult because you're trying to predict how long the disruption will persist for. There's no doubt we're not going to be back to normal by the end of this year — it's going to take longer than that. It's impossible to tell. You look at the Ukraine war: we all thought that probably would be over in 6 months, 12 months, and of course here we are many years later and it's still rumbling along. Donald has stirred up a hornet's nest. It's a big country around there and 90 million people there. Quite difficult to get the hornets back in the hive. So I don't know how long it will last, but I'm afraid maybe not so good for the world, but it's been quite good for chemicals and oil and gas so far.

Yeah, Project One was going swimmingly. As most people will know, one of the innovative aspects of Project One is that we broke the facility down into 15 or 17 modules, which we constructed overseas in Indonesia and Thailand and Abu Dhabi, because you can take advantage of lower labour costs — about six bucks an hour versus about 80 euros per hour in Antwerp. It's becoming increasingly common in the world but not particularly common to build in a modular fashion. We have all but two of those modules in place in Antwerp and bolted onto the ground and connected, and that's all gone very well. But sadly the last two were not made in Indonesia — they were made in Abu Dhabi and they were being bolted onto the ships just before Donald arrived in Iran. So they're stuck in the Straits of Hormuz at the moment, and so far we've seen a delay of about two to three weeks. They're on Chinese ships, so there's more sympathy from Iran for Chinese ships. So we're hopeful that they'll get through there in the next two or three weeks, but again we don't know.

Never forget that Europe is a very large marketplace — a huge marketplace — and it will always have a very significant demand for petrochemicals. They're such base products — you can't run hospitals or deliver food or make most of the products we're familiar with without a chemical industry. So there's always going to be a pretty strong base industry there, even if some of it is replaced by imports. And Project One will have a cost base way beyond any of the other petrochemical facilities in Europe because it's ethane based, and ethane is just so much more competitive than naphtha. Not only will it have a very low carbon footprint, it will have the world's latest technology, world scale, and a fabulous cost base. Nobody will be able to compete with Project One in Europe. There are still probably 35, 40 crackers left in Europe, and this will be by far the most competitive. It will be the dominant cracker in Europe without any question, and we'll be there forevermore, because we're never going to see a Europe where we have no chemical industry.

We are in China now, not in quite as significant a way as we initially planned. We've retreated a little bit but we still have a fairly significant footprint in China. That will become successful as China settles down and deals with their excess capacity. They obviously took the decision 20 years or so ago to become self-sufficient in base industries, of which chemicals is a major one. But they overshot — not only did they become self-sufficient, they continued building new facilities and built capacity in excess of their requirements. And then you finish up with this export philosophy that impacts on foreign markets like America and Europe, and then you get the backlash when tariffs start to come up. That's created some pressures in China — it's not a very profitable industry today because they've got excess capacity compared to domestic demand. But that will settle down because natural growth in China will absorb that excess capacity. And I think INEOS will develop a very interesting position in raw material supply to China with our position in ethane particularly — we're certainly one of the top one or two shippers of ethane around the world. China is predominantly liquid crackers but with some capability of conversion to partially ethane. So I think we'll finish up with a trading business that's quite interesting with China as well as some base footprints. Given China is going to be the economy that rivals the United States — two very vibrant economies — I think for INEOS to be in China, understand what's happening there, and always be aware of potential opportunities, will be healthy in the longer term.

Yeah, for sure it's cyclical. I don't think we can remember a cycle where we've been on the bottom for such a prolonged period of time. But there are some special circumstances we've not encountered before, which is the overbuilding in China is what's created most of it, coincident with the aftermath of COVID, coincident with Europe's energy policy or lack of energy policy and competitiveness. Unfortunately, for chemicals it's been a perfect storm.

Yeah. The way to combat inflation is you put interest rates up, which does combat inflation, but unfortunately it suppresses growth. So you finish up with flat markets. In a place like Europe, you've got high energy costs, carbon tax, and this reluctance to put tariffs in place, so the European marketplace is difficult. And then in America you've got Trump and his tariffs, which is good for the domestic market in America, but America because it has such competitive raw materials and energy was an export-based marketplace. So it had excess product in America because they used to ship a lot of product around the world, but when Donald put the tariffs up, China put the tariffs up as well, which suppressed the exports from America. That impacted back on the American marketplace and dampened down the price set in America as a consequence. As I said, it's a perfect storm, really, but perfect storms never last forever. You have a day of sunshine normally follows at some stage, and we're all praying for that.

The key to being competitive in the chemicals industry is to have first quartile assets. First quartile assets are the largest ones with the best economics. INEOS went through the 2008 crisis and we cut out a lot of our third quartile assets, and we had one or two fourth quartile assets which we shut down. We've done a bit of that during this recession. But the majority of INEOS is in that first or second quartile bracket, and first and second quartile assets will always survive.

My focus has not been on growth particularly. The focus for the last two or three years has been battening the hatches down during this difficult period. There are the greatest opportunities in INEOS in the longer term — we talked a little while ago about the trading position in China. We'll be last man standing in Europe because if you look at the 10 majors in chemicals in Europe, eight of those are exiting, because they're very uncomfortable with the European economics. But last man standing will be in a very good position. We have great assets in America. We've got oil and gas which is doing very well, and there are lots of opportunities to continue to grow in oil and gas. But at the moment it's mainly batten the hatches in chemicals until we come out of the recession, and it might be that we're seeing that at the moment, because things have improved a lot in the last three or four weeks since the invasion. That could continue through the course of this year, so it might be that that ray of sunshine turns into full sun in the next year or so. But it's batten the hatches in chemicals, and we'll look at great opportunities in oil and gas.

I think the focus we've always had is we want to have really reliable assets. Even if you run at 99% reliability, 1% means the unit is shut down for 3.6 days. Even 99% sounds fantastic, but it does mean the asset is shut down 3.6 days. If you're running really big first or second quartile assets, you want them running all the time. That focus hasn't changed. What we have to do is constrain cash at the moment — we have to run all our businesses at cash neutral. We can't run at cash negative in these difficult circumstances. That is an absolute constraint. All the chief executives in INEOS understand that. It requires some juggling on their part — they understand that the single most important aspect of their business is to maintain reliability in their assets, but they have a constraint, which is cash, because they need to run cash neutral. And that's life. There isn't some magical chap writing checks for INEOS. The magic money tree doesn't exist, I'm afraid. I know lots of politicians think it does, but I'm afraid it doesn't in my experience.

I think the best example, which is very current at the moment, is Project One in Europe, where we are building a gas cracker and importing raw materials from the Permian Basin in America, which is super competitive compared to the raw materials Europe typically uses, which are naphtha. That's been a really innovative project for Europe, and we have to get it over the line. We've got this hiccup with two of the modules being held behind the Straits of Hormuz, but once that's on stream, it will be an immensely successful asset for INEOS, and I think it means we'll probably become the dominant player in Europe. That's probably the biggest example of innovation and efficiency in INEOS today. We just need to get it over the line by Christmas or just shortly after Christmas.

36-inch tires — I quite like 36-inch tires on the Grenadier instead of the 32s, which I've got on mine. I think given the design brief for the Grenadier, it hit the nail on the head, really. It is a versatile car — it's very capable on road and it is the most capable vehicle off road. It's remarkably comfortable given what it can cope with. The design is fairly timeless — it's not a jelly mold, it's got its own unique character. It's extremely well built and very high quality. All the engineering in that car is extremely high quality, which in a way means the car is quite expensive, but what you're buying is the best engineering on the planet. There are something like two and a half thousand welds in the chassis. It's got this fabulous BMW 3-liter inline engine, both petrol and diesel, a ZF gearbox, and ThyssenKrupp made the chassis. It's a fabulous car.

One of the biggest issues at the beginning — and I still don't know whether we made the right decision, actually, but I think we probably did — was whether to put a beam axle at the front or independent suspension. The beam axle is the most rugged and gives you the most highly articulated off-road vehicle when you're trying to negotiate very difficult conditions, compared to independent suspension. But it does bring some limitations on the road in terms of turning circle, and the steering is a bit less responsive. We sort of went for purity, because we did say it would be the best off-road vehicle in the world. There are one or two vehicles with beam axles — I think the Jeep has one and the old Toyota Land Cruiser. If I had my time again, would I go for independent suspension? I don't know whether I would or not, but we certainly have a vehicle which is fabulous off-road and extremely comfortable on the road. The only grumble I have occasionally is that the interior seating is very functional — the Recaro seats and all that — you wouldn't describe it as luxurious. We don't have more luxurious seating, maybe it's because of my age and I like a softer seat. But then if you do a long journey off-road, what you want is a proper seat that holds you in.

Yes, that is a very — probably less so in America, but in Europe of course a lot of the garages are limited to two meters, and we missed that. There's no question that — you're probably right, that is an error.

It depends how you look at debt, because you've obviously got the absolute quantum of debt, but in a sense your debt doubles if your EBITDA halves. Because what's important is the ratio of your profitability and your debt — a big company can support a large amount of debt and a small company can only support a small amount. What has happened in this unprecedented recession, which has now gone on three years, is INEOS profitability has reduced by two-thirds. So we're now at a third of where we were in 2021 or 2022, which in context enlarges the debt burden. Then we've also got Project One — historically INEOS has acquired assets, so if you use debt to acquire an asset it's immediately matched by incremental EBITDA from the acquisition. But if you build an asset, you have to wait until it's completed before you get the benefit. So you accumulate debt through the period but you have to wait for the EBITDA, and that's where we are with Project One. It's a four and a half billion project which has overrun somewhat because the Belgian government took the permit away when we had 10,000 people working around the world. So that will be at least half a billion to a billion overspent. But I think when Project One comes on, it's going to print money. I think we're seeing at the moment the chemicals industry coming out of the recession — sometimes it moves quite quickly. So I suspect 2026 is going to be much much better than 2025. We've been very focused on keeping the business cash neutral so that the debt burden doesn't grow.