The Short Answer
LyondellBasell (LYB) is currently doubtful under the examined quantitative screens. Its chemicals and polymers business is generally permissible at the activity level, but the latest total-assets debt ratio is above the examined FTSE Yasaar, MSCI and Malaysia limits.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-13.
12,921 / 33,958
2,635 / 33,958
5,892 / 33,958
31 / 7,197
- Financial
- Fails
- Overall
- Fails
Debt/assets are 38.04%, above the examined FTSE 33.333% limit. Liquidity is 7.76%, receivables plus cash are 17.35%, and disclosed interest income/revenue is 0.43%; debt is the binding failure.
- Financial
- Fails
- Overall
- Fails
Debt/assets are 38.04%, above the examined MSCI 33.33% total-assets limit. Liquidity and receivables plus cash are below their limits; the financial result still fails on debt. This is a calculation against the named method, not an index-membership claim.
- Financial
- Fails
- Overall
- Fails
Debt/assets are 38.04%, above the examined Malaysia SAC 33% limit. Liquidity is below the Malaysia limit, but the debt failure controls the financial result. This is a calculation against SAC ratios, not an official classification of a U.S.-listed security.
- Financial
- Not calculated
- Overall
- Not calculated
A properly licensed and reproducible historical market-cap series is not stored, so market-cap methods are not estimated from a current spot price.
Business-activity disclosure
LyondellBasell manufactures chemicals, polymers, plastics and catalysts and licenses polymer-processing technologies. Those core industrial activities are generally permissible at the activity level, while the discontinued Houston refining operation and environmental stewardship remain qualitative review topics.
Limitation: The filing does not allocate a universal prohibited-revenue numerator by end use, product formulation or customer activity, so no exact prohibited-revenue percentage is asserted.
Purification
LyondellBasell discloses interest income but does not provide a scholar-approved purification percentage. Investors should follow the qualified scholar or methodology they use rather than applying an invented fixed rate.
Inputs, assumptions and primary sources
- Inputs use LyondellBasell's March 31, 2026 Form 10-Q; amounts are USD millions and revenue and interest income are for the three-month period.
- Debt uses the filing's total debt including current maturities of $12,921 million: $1,467 million current maturities, $226 million short-term debt and $11,228 million long-term debt.
- Cash uses $2,635 million of cash and cash equivalents. The filing identifies marketable securities inside cash and cash equivalents; no separate interest-bearing-securities balance is added to avoid double counting.
- Receivables use $2,984 million of trade receivables plus $273 million of related-party receivables.
- Continuing-operations sales and other operating revenues were $7,197 million and disclosed interest income was $31 million. The screen does not infer a fixed purification percentage.
- LyondellBasell ceased Houston refinery operations in February 2025; refining is reported as discontinued operations in the current filing.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Petrochemicals, plastics, and chemical-processing manufacturing is generally permissible at the activity level under standard Sharia methodology. The current asset-based financial screen fails on debt/assets of 38.04%; market-cap methods are not calculated without a licensed historical series.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
LyondellBasell's Business Activity
LyondellBasell operates across several reporting segments:
- Olefins and Polyolefins (Americas and Europe/Asia/International): Ethylene, propylene, polyethylene, and polypropylene — the world's most widely used commodity plastics
- Intermediates and Derivatives: Propylene oxide, oxyfuels, intermediate chemicals, and specialty derivatives
- Advanced Polymer Solutions: Compounding and specialty engineered plastics
- Refining: The Houston refinery — being wound down
- Technology: Licensing of proprietary polyolefin process technologies (Spheripol and Spherizone) and the Circulen circular-economy and recycling technologies to producers worldwide
Petrochemicals and plastics manufacturing is unambiguously permissible at the activity level under standard Sharia methodology.
Concerns to Be Aware Of
1. Debt-to-Market-Cap Ratio (Cyclical)
LyondellBasell carries moderate debt typical of a capital-intensive commodity-chemicals producer. The consolidated debt-to-market-cap ratio should be verified against the 33% Sharia threshold at the time of investment — chemical-industry earnings (and therefore market capitalization) are cyclical, which can push the leverage ratio higher during downcycles.
2. Environmental Considerations
Plastics and petrochemicals production carries environmental considerations (plastic waste, emissions). Some scholars apply additional ESG scrutiny on environmental-stewardship (khalifa) grounds. This is an ESG consideration rather than a standard Sharia screen concern.
3. Legacy Refining Business
The Houston refinery ceased business operations in February 2025 and is reported as discontinued operations in the latest filing. Verify the current corporate perimeter when reviewing any remaining closure or asset-sale obligations.
4. Minor Interest Income
LyondellBasell holds cash and short-term investment balances that generate small interest income, below the 5% Sharia threshold but warranting purification of a small portion of dividends.
Current Financial Ratios (March 31, 2026)
Based on LyondellBasell's latest Form 10-Q:
- Debt / assets: 38.04% — above the examined 33% asset-based limits ❌
- Cash / assets: 7.76% — below the examined liquidity limits ✅
- Receivables + cash / assets: 17.35% — below the examined receivables limits ✅
- Disclosed interest income / revenue: 0.43% — below the FTSE 5% threshold ✅
- Prohibited-revenue numerator: Not disclosed; business screen remains incomplete
How to Read the Result
The current result is doubtful: the core chemicals and polymers activity is generally permissible, but the latest debt/assets calculation fails the examined asset-based limits. This is a ZakatInvest calculation, not an official index-membership claim.
- FTSE Yasaar asset-based debt screen — Fails at 38.04% ❌
- MSCI Islamic total-assets debt screen — Fails at 38.04% ❌
- Malaysia SAC asset-based debt screen — Fails at 38.04% ❌
Bottom Line
LyondellBasell (LYB) is currently doubtful under the examined quantitative screens. The core chemicals, polymers and technology-licensing businesses are generally permissible, but debt/assets of 38.04% fails the named asset-based methods. The prohibited-revenue numerator is not disclosed, and no fixed purification percentage is asserted for the $31 million of disclosed interest income.
For Muslim investors seeking materials and chemicals exposure, LYB sits alongside other halal-screened names like Air Products (APD), Dow (DOW), Sherwin-Williams (SHW), and PPG Industries (PPG), though investors should verify each name's current leverage individually.
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