Russia looks set to overtake the Middle East to become Asia's largest naphtha supplier for the first time ever in April with the ongoing Iran war severely constricting product exports from the Strait of Hormuz.
Naphtha arrivals from Russia to Asia are so far expected at 1 million metric tons in April, accounting for around 37% of total imports while arrivals from the Middle East are expected at around 387,000 mt or 14% of the total, shipping data from Vortexa show at the time of writing.
April inflows from Russia are actually in line with monthly volumes in the first quarter of the year at around 1.09 mn mt or 10-20% of Asia's naphtha imports. But exports from the Middle East have plummeted from the 4.4-4.7 mn mt seen in Jan. and Feb. and the 3.1 mn mt expected for March. This plunge in Middle Eastern arrivals have upended the origin composition of naphtha flows into Asia, of which the Middle East typically account for over 50%.
Oil and refined product markets have been thrown into turmoil since the US-Israel war against Iran on February 28, which disrupted shipping through the Strait of Hormuz and curtailed oil production in the region. As a result, some crackers in Asia have been forced to scale back operations and declare force majeure amid a feedstock shortage, while others are scouring the globe for replacement cargoes to keep operations afloat. Typically, almost half of Asia's naphtha comes from the war-hit Middle East.
With Middle Eastern flows severely reduced, Russian products that have been shunned in recent years due to a litany of U.S. sanctions are now attracting buying interest.
Under authorization granted by the U.S., vessels carrying Russian crude were allowed to complete sales and offloading between March 12 and April 11, expanding an earlier India-specific waiver. A surge in buying inquiries for Russian barrels has been observed in the spot market, with a flurry of buyers already rushing to snap up cargoes the same day.
A Dubai-based trading company was also heard to have launched a spot tender this week offering naphtha loading from Russia, according to sources familiar with the matter.
Other than Russian cargoes, market participants have also sought options elsewhere, including from India, Algeria, and the U.S. to compensate for the fall in Middle Eastern arrivals, according to shipping data and sources.
Exports from the Middle East are still streaming out from the Red Sea. Sources noted that Aramco has been transporting naphtha via the East-West pipeline to the Red Sea coast to bypass disruptions around the Strait of Hormuz and meet delivery commitments, albeit with limited availability of the feedstock. Premiums for these shipments, estimated by sources, could reach as high as $70/mt to Mideast Gulf assessments.
"Red Sea shipments are covered by insurance, but the route is also considered high-risk, which will command higher prices," a shipping agent said.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Yiwen Ju, yju@opisnet.com; Editing by Hanwei Wu, hwu@opisnet.com
(END) Dow Jones Newswires
March 20, 2026 07:48 ET (11:48 GMT)
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