Naphtha prices and margins rise on renewed supply concerns

what happened

Asian naphtha markets strengthened on Monday as attacks on ships in the Strait of Hormuz revived concerns about supplies. Reuters reported that higher freight costs had also reduced arbitrage opportunities. The naphtha refining margin over Brent increased to $239 per metric ton, its highest level since July 28. The price of second-half November cargo moved above $1,000 per ton, while the market entered a steep backwardation of $31 a ton.

The gasoline crack was little changed after retreating from record highs last week. Prices and margins nevertheless remained firm, supported by strong demand from key buyers, traders said. Indonesia, Asia’s largest gasoline importer, sought up to 5.6 million barrels of 90-octane gasoline for delivery in November and December. A Pertamina tender for 500,000 barrels of benchmark-grade fuel closed on Friday and remains valid until October 15.

Saudi Aramco CEO Amin Nasser said the company was examining additional crude export routes and working to increase overseas storage capacity as ongoing regional conflicts disrupt global energy markets. Goldman Sachs lifted its December 2026 Brent forecast to $90 a barrel from $85, pointing to persistent supply risks. Singapore cash assessments showed Naphtha CFR Japan M1 at $989.00 per metric ton, M2 at $966.75 and the differential at $22.25; the Singapore FOB netback was $107.89 per barrel and the naphtha-Brent margin was $217.70. Gasoline 97, 95 and 92 were $151.14, $150.32 and $144.80 per barrel, while the gasoline crack was $41.96.

why it matters

Higher freight and naphtha margins indicate a stronger risk premium around supply routes through the Strait of Hormuz. Indonesia’s buying interest supports gasoline demand, while Goldman Sachs’ forecast change underscores continued focus on supply disruptions.

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