en.Wedoany.com Reported - Asian naphtha prices have plunged to their lowest levels since early March. Abu Dhabi National Oil Company (ADNOC) resumed exports via Oman's Sohar Port in May, establishing an alternative supply route.
After the war restricted shipping through the Strait of Hormuz, ADNOC suspended exports of approximately 1 million tons per month of petrochemical feedstock from its Ruwais refinery in April. The UAE producer deployed tankers last month to transport cargoes from the refinery within the Gulf, transferring them to other tankers at Sohar Port for re-export to Asia. This process is known as ship-to-ship transfer.
ADNOC's strategy provides an alternative supply route for buyers reluctant to transit the strait, allowing more petroleum products to reach Asia. Shipping data provided by traders shows that two tankers, Minerva Pisces and Torm Gwyneth, loaded naphtha from ADNOC-controlled vessels at Sohar around May 30 and are heading to Asia. Traders indicated that more tankers may have loaded ADNOC's naphtha via Sohar, but shipping data does not reveal the movements of all vessels. An ADNOC spokesperson said: "As a matter of policy, we do not comment on the location, movement, or route of vessels."
After supply disruptions from the Gulf region, which accounts for more than half of Asia's imports, Asian naphtha prices surged to a record high of $1,300 per ton in March, with refining margins against Brent crude reaching an all-time high of $467 per ton. On Tuesday, benchmark naphtha prices for delivery in the second half of July in Asia fell to $788 per ton, with margins dropping to around $84 per ton. Naphtha prices are also under pressure from demand destruction, as feedstock shortages have led to widespread production cuts and force majeure at Asian petrochemical complexes. The International Energy Agency (IEA) expects global naphtha demand to decline by 80,000 barrels per day this year to 7.136 million barrels per day. An Indian trader said naphtha prices are unlikely to return to March highs due to weak demand and market expectations of no further supply cuts from the Gulf region.
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