OilChem: Middle East conflict drives Chinese naphtha prices up, yet weak demand caps gains

The escalation of geopolitical tensions in the Middle East on February 28, which led to disruptions in the Strait of Hormuz, has injected a significant risk premium into international crude oil prices, providing strong cost-side support to the Chinese naphtha market.

Escalating Middle East tensions boosted crude oil prices, lifting Chinese naphtha costs. In Shandong, straight-run and hydrotreated naphtha rose 3.03% and 4.57% respectively in the two days to March 2. However, post-holiday gasoline demand has lulled and ethylene crackers are running low, loosening fundamentals and keeping downstream buyers to