Naphtha slipped 0.3 per cent to US$877.90 a tonne on 15 October, according to market data. The dip was small against the trend. The petrochemical feedstock has gained 4 per cent in a month and nearly 80 per cent since the start of 2026.

Naphtha rarely makes headlines. This year it has, because the war with Iran cut off the Gulf, which supplies more than half of Asia's imports. Steam crackers from Singapore to South Korea have cut runs or declared force majeure.

The pain is uneven. Crackers in North America, which run mostly on ethane from natural gas, have gained ground on Asian rivals tied to oil-linked naphtha.

What naphtha is

Naphtha is a light liquid produced when crude oil is refined. Most of it feeds steam crackers, which break it into ethylene and propylene, the building blocks of plastics, fibres and packaging. Asian crackers rely on naphtha far more than US plants, which mostly use cheaper ethane from shale gas.

The Hormuz shock

Asia's dependence on the Gulf left it exposed. Its main petrochemical economies imported 86.6 million tonnes of naphtha in 2025.

Middle Eastern suppliers provided about 54 per cent, ICIS data show. The UAE alone supplied 23 per cent.

When shipping through the Strait of Hormuz largely stopped after late February, the effect was immediate. Asian naphtha hit a record US$1,300 a tonne in March, and the refining margin reached a record US$467 a tonne over Brent. Cracker operators in Singapore, Indonesia and South Korea declared force majeure.

Prices then fell sharply. Abu Dhabi's ADNOC had halted about 1 million tonnes a month of naphtha exports in April.

In May it resumed shipments via the Omani port of Sohar. By 2 June the Asian benchmark had dropped to US$788 a tonne.

Margins under pressure

High feedstock costs hurt Asian crackers most. northeast Asian naphtha crackers were losing US$303 a tonne on spot production in the week to 9 July.

One industry insider told OPIS that some demand was gone for good.

Weak margins have hit consumption. The International Energy Agency expected global naphtha demand to fall by 80,000 barrels a day in 2026, to 7.136 million in June. on 29 September that Asian petrochemical demand would stay tepid after China's October holiday.

Trade flows shift

Asia has looked further afield for supply. ICIS says Asian crackers are diversifying imports from Europe, Africa and the Americas. In July that the East-West naphtha spread had widened to US$76 a tonne, drawing cargoes from the Mediterranean and the US.

Naphtha arrivals into Asia via the Bab al-Mandab strait reached 396,100 tonnes in June, the highest since January 2023, Vortexa data show.

China has added its own twist. A 12 per cent consumption tax on domestic naphtha sales, announced in late December 2025, pushed smaller buyers towards imports, General Index reported.

The autumn rebound

Prices have firmed again in recent weeks as crude rallied. The benchmark rose 4.01 per cent over the past month to US$877.90 a tonne. the ethylene-naphtha spread returned to a healthy range from 18 September, supporting cracker buying.

Some capacity is coming back. LG Chem, South Korea's largest petrochemical producer, restarted its Yeosu No 2 naphtha cracker this month after a halt since March. Nomura still expects the company's petrochemical arm to post losses in the third and fourth quarters, citing naphtha and freight costs.

The ethane winners

North American producers have been the clear gainers. Ethane is priced much closer to natural gas than to oil, East Daley Analytics notes. US Gulf Coast ethylene prices rose sharply after the war began while feedstock costs stayed relatively flat.

Risks to watch

Competing feedstocks are a third. General Index expects cheaper alternatives such as ethane to limit naphtha prices over time.

Metric

Value

Price (USD/T)

877.90

Daily change

−2.76 (−0.31%)

Weekly change

+0.83%

Monthly change

+4.01%

Year to date

+79.76%

Year on year

+70.65%

Price date

15 October 2026