Europe and Asia naphtha prices wipe out most war-driven gains

The steep gains recorded across global naphtha markets during the war are close to being eroded, with prices in both Europe and Asia retreating sharply from the peaks reached during the period. Initially supported by soaring crude oil prices and supply disruptions, naphtha values have steadily moved lower as petrochemical demand weakened, availability improved and oil markets came under renewed pressure. Although prices remain above pre-war levels, a significant portion of the rally has already been erased.



Europe surrenders about 80% of its conflict-driven gains

European naphtha prices climbed by around 64% from pre-conflict levels to their late-April peak, supported by soaring crude oil prices and tightening supply conditions. Market sentiment was buoyed by stronger blending activity, shrinking inventories in the Amsterdam-Rotterdam-Antwerp (ARA) hub and disruptions affecting exports from major naphtha-exporting regions, which prompted buyers to seek alternative cargoes from Northwest Europe despite elevated freight costs.

Since reaching that high point, however, prices have fallen by roughly 31%.

The downturn has coincided with a notable increase in regional inventories as inflows into the ARA hub accelerated. Market participants also reported weaker blending activity, which left more material in storage, while flows from the hub to petrochemical crackers declined. Ongoing disruptions affecting blending and loading operations further reduced naphtha consumption in the region.

Despite the recent losses, European naphtha prices still stand around 13% above levels seen before the war kicked off in early March.

The conflict premium has been almost entirely erased from Asian naphtha

In Asia, the rally was even more dramatic. Naphtha prices nearly doubled from pre-conflict levels to the peak reached at the end of March as soaring crude oil prices and concerns over Middle East Gulf supply disruptions pushed physical cargo premiums sharply higher. Tight availability continued to support sentiment as buyers sought cargoes and physical premiums remained elevated.

Following the March peak, prices gradually moved lower and have since declined by around 46%, falling back below the four-digit threshold.

The retreat came as concerns over Middle East Gulf supply disruptions increasingly took a back seat to weak petrochemical demand. Market participants pointed to lower cracker operating rates, poor downstream margins and softer import requirements across the region. Buyers were also able to secure cargoes at discounts, reflecting softer purchasing interest despite lingering concerns surrounding regional exports.

Even after the decline, Asian naphtha remains approximately 7% above pre-conflict levels.

Oil’s plunge leaves naphtha exposed

Brent crude followed a similar trajectory to naphtha markets during the conflict-driven rally. Oil benchmarks climbed by around 58% from pre-conflict levels to their late-April peak, driven by the same geopolitical tensions and supply disruption fears that supported global energy prices.

Since reaching that peak, Brent has corrected sharply by 26% as the risk premium unwound and prices moved back toward weaker levels. This leaves Brent around 17% above pre-conflict levels, highlighting that the entire energy complex has more than reversed a large part of the war-driven rally.

The alignment between oil and naphtha remains evident. As crude oil surged, naphtha markets in both Europe and Asia moved in tandem, while the subsequent correction in Brent has also coincided with sustained downside pressure in naphtha values. The recent weakness in crude oil has therefore reinforced the downward trajectory already seen in naphtha across both regions.