News
02/03/26
Mideast Gulf naphtha premiums rally on rising tensions
Dubai, 2 March (Argus) — Premiums for naphtha cargoes loading in the Mideast
Gulf surged to a two-year high today, underpinned by concerns over potential
supply disruptions at regional refineries as the US-Iran conflict escalates. The
Mideast Gulf naphtha premium to average spot assessments rose to $42.75/t today,
2 March, Argus estimates, its highest since it touched $44.75/t on 24 March
2024. The conflict has seen airstrikes across the Mideast Gulf region, with
debris falling near several key refineries. The region's main naphtha exporters
said that operations remain largely unaffected, but traders remain wary of
supply risks if the conflict continues. Iran has already signalled it will not
engage in negotiations with the US, raising concerns of a prolonged standoff and
risk of regional instability . State-owned QatarEnergy reported drone attacks on
facilities in Ras Laffan and Mesaieed Industrial City, temporarily halting
output of LNG and related products . The company operates two 146,000 b/d
condensate splitters at its Ras Laffan complex, and any disruption to them could
potentially reduce naphtha output from the Mideast Gulf's second-biggest
supplier to Asia-Pacific. But no confirmation has been provided on which
specific facilities were affected, making it difficult to assess the impact.
Ship-tracking data from Kpler showed that two vessels, the Zenovia Lady and the
Front Cheetah , which were placed on subjects today to deliver 72,000t and
76,000t of naphtha, respectively, have been idled since the attacks on 28
February, indicating delays in loading operations. It is also unclear whether
operations at Shell's 1.1mn t/yr Pearl gas-to-liquids (GTL) plant at Ras Laffan
have been affected, which could further affect naphtha supply. Qatar exports an
average of 970,000t of naphtha each month, with cargoes from Ras Laffan
accounting for 20pc of total Mideast Gulf volumes in 2025. The majority of
Qatari cargoes are shipped to South Korea, Japan, China and Singapore. Oman's
Duqm Port was struck by drone debris, causing operational disruption, although
it remained unclear whether the adjacent 255,000 b/d Duqm Refinery was damaged.
Duqm Refinery has been exporting an average of 220,000t of naphtha per month
since becoming fully operational in 2023. In Kuwait, state-owned KNPC reported
today that debris fell on the 346,000 b/d Mina al-Ahmadi refinery, but
operations were unaffected. Market sources familiar with the facilities
confirmed that other major Kuwaiti refineries, including the 454,000 b/d Mina
Abdullah and 615,000 b/d Al-Zour refineries, were operating normally without
disruption. Kuwait's refineries together supply roughly 720,000t of naphtha
every month on average. Saudi Aramco also temporarily shut its 550,000 b/d Ras
Tanura refinery after a drone strike, citing precautionary measures, although
videos online showed plumes of smoke rising from what appeared to be storage
tanks. The escalating conflict is threatening to disrupt Mideast Gulf naphtha
exports to its largest market, Asia-Pacific. The majority of naphtha cargoes
transit directly through the strait of Hormuz. Security concerns intensified
after at least three vessels were hit by explosive projectiles near the strait
over the weekend, prompting shipping owners to stay away from the region
entirely. The Joint Maritime Information Center (JMIC) has raised the threat
level in the strait to "critical", underscoring the mounting risks to commercial
traffic and increasing the likelihood of loading delays and disrupted flows .
Ship-tracking data from Kpler showed several Long-Range 1 and Medium Range
tankers carrying naphtha idling near the strait, signalling potential delivery
delays. The disruption is being compounded by suspended operations at Jebel Ali
and Duqm ports . By Rithika Krishna Send comments and request more information
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