Premiums surge and refinery run cuts hit Asian petrochemical producers as Iran war disrupts naphtha supply and prices double

Naphtha supply disruptions tied to the Iran war are driving sharp price spikes and production cutbacks for Asian petrochemical makers. Benchmark premiums on first-half May naphtha cargoes reportedly jumped to around $1,300 per ton, roughly double pre-war levels, with prompt-month pricing pushed into record backwardation. Buyers are paying large per-ton premiums to secure feedstock, while Asia’s reliance on Gulf naphtha is leaving limited substitution options. With Middle East deliveries to Asia falling dramatically in March, and Russian exports also constrained, producers are reducing utilization rates due to feedstock scarcity and the operational limits of cracker plants. The impact is strongest in Northeast Asia, where reduced cracker runs are expected to continue, raising concerns about how quickly petrochemical demand and operations can stabilize even if the war ends.