News
10/03/26
Mideast naphtha supply tightens as disruptions mount
Mideast naphtha supply tightens as disruptions mount
Dubai, 10 March (Argus) — Mideast Gulf naphtha supply is coming under growing
pressure, as Kuwait's state-owned KPC and Bahrain's Bapco became the latest
refiners to signal export disruptions, with cargo cancellations and shipment
delays continuing across the region. KPC, which depends entirely on the strait
of Hormuz to ship supplies, issued a force majeure on its crude and refined
product exports, potentially removing naphtha exports of 560,000 t/month, or
165,300 b/d, from the regional supply pool, according to data from the Joint
Organisations Data Initiative (Jodi). Bapco Energies also issued a similar
notice after a fire broke out at its 405,000 b/d Sitra refinery on 9 March,
disrupting a further 167,000 t/month, or 49,300 b/d, given that it prioritises
domestic requirements over exports. Kuwait's naphtha refinery output averaged at
194,000 b/d in 2025, and Bahrain's averaged at 49,900 b/d, Jodi figures showed.
Abu Dhabi's state-owned Adnoc has notified buyers of shipping delays. Meanwhile,
QatarEnergy issued cargo cancellation notices to customers last week. Neither
has declared force majeure, but such a move from the regional refiners could
threaten a further 1.96mn t/month, or 574,000b/d, of naphtha exports from the
UAE and 997,000 t/month, or 291,000 b/d, from Qatar, according to ship-tracking
data from Vortexa. The data exclude inter-regional deliveries. QatarEnergy faced
drone attacks on its facilities in Ras Laffan and Mesaieed Industrial City, but
it remains unclear whether its 146,000 b/d condensate splitters at Ras Laffan
were affected, which could reducing naphtha output. Meanwhile, Oman exports
about 271,000 t/month, or 79,000 b/d, of naphtha on average. State-owned OQ's
Duqm refinery, located outside the strait of Hormuz, offers an alternative route
for cargoes bound for Asia-Pacific without passing through the waterway. Several
drone attacks at Duqm port last week, coupled with higher shipping costs in
Omani waters, have hampered flows. Run rate cuts at the refinery were being
considered, market participants said. But this could not be immediately
confirmed with the refiner. Taken together, the four key exporters put an
estimated 4.18mn t/month of regional naphtha exports at risk. Supply fears are
already reverberating through the Asian naphtha market, with regional prices
hitting a four-year high on 9 March and Mideast Gulf naphtha premiums rising to
$90.75/t on the same day, the highest level in at least five years. The
disruption is also weighing on downstream operations, with Asian petrochemical
producers trimming run rates in anticipation of tighter crude feedstock
availability. Any prolonged loss of Mideast Gulf supply would likely push Asian
buyers towards alternative sources such as Europe, where naphtha values are also
being supported by spring refinery maintenance and firm gasoline blending
demand. The East-West spread eased to $59/t on 9 March from a multi-year high of
$64/t on 3 March, underscoring the strength in European naphtha values. Cargoes
from west of Suez would take at least 28 days to reach Asia-Pacific via the Suez
Canal, compared with an average voyage time of 15-17 days for shipments from the
Mideast Gulf, ship-tracking data from Kpler show. By Rithika Krishna Send
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