Road fuels

Mediterranean naphtha exports to Asia hit 4-month high

Mediterranean naphtha exports to Asia hit 4-month high

London, 19 August (Argus) — Mediterranean naphtha exports to Asia have risen to a four-month high in August, as recovering Asian petrochemical demand and supply uncertainty in the Middle East draws more barrels east, helping absorb surplus supply from a weak European market. Loadings from the Mediterranean bound for Asia have averaged 219,000 b/d so far in August, up from 126,000 b/d in July, a four-month high, according to Kpler data. Asian petrochemical producers restarted cracker operations after extended shutdowns earlier this year caused by poor margins and feedstock supply disruptions, increasing spot demand for imported naphtha. While the Middle East traditionally supplies much of Asia's naphtha requirements, ongoing tensions in the region have encouraged buyers to source cargoes further afield from the Mediterranean . The arbitrage remained open, with Mediterranean cargoes continuing to be fixed for delivery into Asia, including on LR1 tankers, a naphtha trader familiar with east-west flows said. European naphtha demand remains subdued. Record-low Rhine water levels have further restricted consumption by disrupting feedstock deliveries to inland petrochemical crackers and limiting outbound product movement. Water levels at the Kaub bottleneck fell to a record low of 17cm this month, leaving the upper Rhine largely inaccessible to barges. Crackers at Wesseling have been among the most exposed to reduced river traffic after Shell's closure of its nearby 147,000 b/d refinery increased reliance on imported feedstocks. Further south, BASF's Ludwigshafen crackers face challenges moving products and co-products by barge, while some petrochemical crackers have struggled because they rely on river water for cooling. Weaker domestic demand has left more naphtha available for export. Independently-held naphtha stocks in the ARA hub rose to 598,000t on 13 August, 74pc above levels a month earlier. Supply has been supported by high naphtha yields from lighter crude slates and strong refinery runs, participants said. Increased flows of light Mediterranean crude and CPC Blend at attractive prices have encouraged refiners to process lighter feedstocks , boosting naphtha output. European naphtha cracks against Ice Brent futures have traded at a discount for most of August, averaging about $4/bl over the past week. Naphtha cracks against prompt North Sea Dated crude have also remained firmly negative, averaging about $7/bl over the same period. European gasoline blending has given limited support for naphtha demand despite favourable margins, a gasoline trader told Argus . The gasoline-naphtha spread climbed back above $300/t over the past week, while the Eurobob oxy swap September-October spread closed at $93.75/t on 17 August, the strongest backwardation since October 2022 . Buying interest for naphtha and high-octane blending components such as reformate has slowed despite the supportive economics, limiting an alternative outlet for surplus supply, traders said. Arbitrage economics improved in recent days. The east-west naphtha swap spread, which surged to record highs during the Middle East hostilities in July before retreating, widened to $37.50/t on 19 August from $30/t on 13 August, improving incentives for eastbound movements. By Jide Tijani Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.