Strait of Hormuz disruption sends China naphtha price and crack spread to record highs

The disruption of naphtha flows through the Strait of Hormuz, shutting off an estimated 1.20 million barrels per day to Asia, has sent Chinese naphtha prices and crack spreads to historic extremes since March.

As of April 7, Shandong naphtha prices hit Yuan 8,796/tonne and the crack spread reached Yuan 1,450/t, both record highs. Geopolitical supply disruptions are the key driver: March imports plunged to a bare-bones 1.10-1.30 million tonnes, domestic refinery operating rate fell to 68.79%, spot sales were curtailed, and downstream