Naphtha tanker hit by missile in Red Sea: Update 2

Includes naphtha market outlook.

A tanker carrying gasoline blendstock naphtha was struck by a missile Friday while transiting the Red Sea, according to the shipper, Trafigura.

The Marlin Luanda was struck by a missile and caught fire, Trafigura said. The Yemeni armed forces claimed responsibility for the attack.

The vessel is a long range 2 (LR2) product tanker that loaded in the Mediterranean and was pointed toward southeast Asia, according to vessel tracking data. The Marlin Luanda's registered owner is Oceonix Services, which is listed with a UK address, according to a ship database run by the International Maritime Organization.

Crews are deploying firefighting equipment in one of the ship's cargo tanks on the starboard side, Trafigura said.

The attack will exacerbate an existing naphtha supply crunch in Asia, where prices are already elevated on strong demand and prior delays from the Red Sea attacks.

European naphtha prices also ended the week higher amid supply concerns following a fire at the Novatek refinery in Ust-Luga, Russia. The refinery is Russia's top naphtha export terminal, with top destinations including Singapore, China and Malaysia.

US Gulf coast naphtha participants remained watchful of an increased pull for naphtha out of Asia. Most regular naphtha exporters have already assimilated the higher costs of going via the drought-restricted Panama Canal in recent weeks.

A 20¢/USG bump up in US Gulf coast N+A naphtha prices in January had squeezed arbitrage opportunities, but domestic values were starting to retreat again this week.

Rising naphtha prices in Europe and the Asia Pacific would re-open opportunities to those destinations.

By Nick Watt and Daphne Tan