Due to the high environmental burden of plastics, this study aimed to evaluate the environmental performance of chemical recycling of plastic waste through Life Cycle Assessment (LCA), focusing on pyrolysis oil production as the primary output. A pyrolysis plant in Almería, Spain, was chosen as a case study. The results indicate that the production of 1 L of pyrolysis oil from plastic waste generates about 0.032 kg CO₂ eq and a water consumption of 0.031 m³, with other impact categories registering values of less than 0.1 kg/L or 0.01 m²a crop eq/L, reducing impacts in 17 out of 18 categories compared to fossil diesel. In addition, its chemical and physical properties, close to those of fossil diesel, suggest its suitability for internal combustion engines, although as a blend rather than a complete substitute. Chemical recycling also appears to be more environmentally favorable than incineration and landfilling in all 18 impact categories, achieving significant benefits, including a reduction in global warming of −3849 kg CO₂ eq/ton, ionizing radiation of −22.4 kBq Co-60 eq/ton, and fossil resource consumption of −1807.5 kg oil eq/ton. These results, thus, highlight the potential dual role of chemical recycling of plastic waste, both in mitigating environmental impacts and in supporting circular economy goals by reducing demand for virgin plastics. However, although it appears to be a promising technology, challenges associated with high energy requirements, raw material variability, and scale infrastructure still need to be addressed to ensure industrial competitiveness and significant environmental benefits.