Naphtha

Naphtha is the light end of the crude barrel between LPG and kerosene, and it leads a double life. In the Atlantic basin it is mostly a gasoline-economy molecule: reformed into high-octane blendstock or blended directly. East of Suez it is mostly a petrochemical feedstock: Asia's steam crackers consume it to make ethylene and propylene, and its aromatics-rich cuts feed benzene, toluene, and xylene production. The benchmarks reflect the split: Platts CIF Northwest Europe cargoes price the Western market, and C+F Japan, the basis of the Mean of Platts Japan (MOPJ) swaps curve, prices the Asian one. Both quote in dollars per tonne, and the East-West spread plus freight governs the steady flow of European, Mediterranean, US, and Middle East naphtha toward Asian crackers.

Naphtha's defining competition is with LPG. Modern flexible crackers can swap a share of their feed to propane or butane when those price below naphtha on an ethylene-yield basis, so the naphtha-propane spread is the market's daily referendum on feedstock economics. The US shale boom tilted the global game: cheap American ethane and LPG gave US crackers a structural cost advantage and pushed marginal olefin economics against naphtha-based producers, while China's enormous 2020s buildout of naphtha-fed crackers and reformers kept absolute Asian demand growing anyway. The naphtha-Brent crack is the cleanest read on that tug of war, persistently weak when petchem margins sag and gasoline blending fails to absorb the surplus.

Sanctions rewired the supply map after February 2022: Russian naphtha, embargoed by the EU from February 5, 2023, rerouted to Asian and Middle Eastern buyers at discounts, while Middle East condensate splitters and US Gulf exports grew as alternative sources for Asia.