The naphtha complex maintained strength this fortnight in both regions with M1 cracks remaining near highs reaching mid-month. The threat of the re-emergence of Russian naphtha is yet to materialise with a peace deal between Ukraine and Russia still in the works. There has been strong gasnaph selling as M1 softened to its lowest level in 2025. This has also contributed to supporting European naphtha on paper. In the Euro crack, trade houses flipped long on 10 Feb, adding at least 1.6mb by 19 Feb, with refiners also buying. Meanwhile, refiners, majors, NOCs, and funds were selling. Further along the curve, refinery sales dominated from Q2 to Q4, while trade houses showed buying interest in Cal’26 and Cal’27.
The Mar’25 naphtha East/West (MOPJ vs NWE naphtha) weakened over the fortnight, dropping from $18.50/mt to $14.50/mt by February 21. Market sentiment remains mixed, with trade houses and refiners buying, while majors and NOCs were selling. Further along the curve, flows against Onyx were skewed short, with majors, NOCs, and trade houses selling in Q2 and Q3.
Open interest (OI) in the naphtha complex saw strong growth this fortnight, with increases across all M1 and M2 tenors. M1 naphtha crack OI rose 33% to nearly 20.4mb, with trade houses adding 2mb longs, while M1 MOPJ crack surged 77% to 3.04mb, and M1 MOPJ flat price climbed 36% to 31.6mb. The only decline was a 1.8% drop in Q3’25 MOPJ crack to 3.44mb. Despite this, all contracts remain above their 5-year historical averages.
The M1 TC5 freight (from the Middle East to Asia) remained largely stable over the past two weeks, dipping from $33.30/mt on Feb 10 to $32.85/mt on Feb 17 before edging back up to $33.20/mt on Feb 21. Similar movements were seen in M2 and Q3’25 contracts, with Q3’25 slipping from $29.95/mt to just below $29/mt. Geopolitical risk premia may be easing, as 47 ships have shifted their route from the Cape of Good Hope to the Suez Canal since early February.
A UK-UAE-Saudi consortium has agreed with Egypt to develop a $7 billion petrochemical complex in New Alamein City, Egypt. Led by Shard Capital Partners, the partnership includes the UAE’s Royal Strategic Partners and Saudi Arabia’s Al-Qahtani Group, working with Egypt’s petroleum and investment ministries. The complex will produce 3.1 million tonnes annually of eight specialised petrochemical products.
Bharat Petroleum Corp. Ltd (BPCL) has signed an MoU with the National Sugar Institute (NSI) in Kanpur to develop sweet sorghum as a sustainable feedstock for bioethanol production. The partnership supports India’s Ethanol Blended Petrol Programme and the government’s push for biofuels.
Russia’s largest petrochemicals company, Sibur, plans to resume output in early March at a plant that was suspended last month after a Ukrainian drone attack, a source told Reuters. The Sibur-Kstovo plant produces ethylene, propylene and benzene that are used in the production of items including plastic pipes, window frames and linoleum. The company announced on January 29 that it temporarily halted production at its facility in Kstovo, located 530 kilometres east of Moscow in the Nizhny Novgorod region.
