Asia aromatics reach multimonth high after crude rally amid Middle East tensions

Asian aromatics have reacted to crude oil hike amid the geopolitical tensions in the Middle East, with several aromatics products reaching a multi-month high on March 3.

At 4:30 PM Singapore time (0830 GMT), the ICE May Brent futures contract was up $8.36/b (11.69%) from the previous close at $79.88/b March 3.

Crude oil futures prices found inflationary pressure as shipping from the Strait of Hormuz halted over the weekend following the initial strikes conducted by the US and Israel against Iran on Feb. 28 and Iran retaliating with counterattacks, targeting US assets in Bahrain, Qatar, the UAE, Kuwait, Jordan and Saudi Arabia, along with striking Israel.

Following the surge in crude oil prices, the Platts CFR Japan naphtha marker jumped $78.875/mt from the previous session to $715.50/mt March 3, while it was last assessed higher at $721.625/mt on July 5, 2024.

Asian paraxylene markets saw bullish sentiment, with Platts assessing the CFR Taiwan/China marker $67.66/mt higher on March 2 at $999.33/mt. The marker was last assessed higher at $1,005.33/mt on Aug. 2, 2024, marking a 19-month high. In early morning trading March 3, upward momentum continued, with both outright prices and floating price premiums suggesting strength in near-term deliveries.

Platts assessed Asian benzene rising $60/mt higher on the session to $832.67/mt FOB Korea March 2, hitting a one-year high, while it was last assessed higher at $833.33/mt on March 14, 2025. Asia-based traders said the surge in crude has created significant volatility in the market, making it difficult to take positions amid uncertainty.

Following the soar in energy complex and feedstock benzene prices, Platts-assessed Asian styrene prices surged $63.50, or 6.57%, to $1,030/mt on March 2, reaching a one-year high.

Platts Asia's toluene FOB Korea benchmark climbed to $781/mt on March 2, marking its highest level since February 2025. The increase was fueled by aggressive bidding during the trading session, as ongoing conflict in the Middle East heightened supply anxieties and prompted buyers to secure cargoes ahead of further disruptions.

Platts-assessed prices for isomer mixed xylenes for the FOB Korea jumped on the March 2 trading session, closing $77/mt higher day over day from Feb. 27 at $832/mt, the highest level since Aug. 14, 2024, where it closed at $835/mt.

At the Asia close March 2, the Platts-assessed MTBE FOB Singapore price was at $779.41/mt, up $80.37/mt from the previous days and the highest since Aug. 10, 2024, when prices were assessed at $784/mt. The FOB China price was assessed at $705/mt, up $35/mt over the same period.

Cautiousness prevails

Market participants are closely watching developments in the Strait of Hormuz, according to several trade sources in Asia, as the conflict could ripple into Asian petrochemical feedstock markets.

According to a regional benzene producer, production is bound to be impacted, though it's too early to determine how significant the effect will be until the market responds over the next few days.

A Southeast Asia-based benzene trader echoed the cautiousness, saying the near-term outlook remains uncertain. "No one can say for certain what's going to happen. Feedstock supply is tightening, and logistics will get more expensive, but I think buyers will draw down inventory and wait for prices to ease rather than pay up for prompt cargoes. It's wait-and-see for now."

The PX market reactions to the immediate impact of the conflict remain mixed. While some PX traders said it was still too early to make changes to production plans, other market sources expected rate cuts across upstream refineries, which will translate to lower downstream petrochemical run rates as well. One PX broker source expected "defensive" rate cuts across some major refiners by 10%-20%, but this could not be verified.

Due to fears of supply uncertainty, isomer mixed xylene demand was heard to be higher in China for the production of downstream PX. Mainly, concerns about the procurement of mixed xylenes affected discussions on paraxylene plant operating rates.

"No one dares to have high operating rates for PX now," a Chinese producer shared.

The cautious stance has also been observed in the Asian toluene market, where sellers stood hesitant to offer amid volatile crude oil and naphtha prices.

"There are no firm offers for toluene because crude oil prices are moving up and down too much," said a Southeast Asian trader.

Similarly, MTBE producers in Asia remain cautious about making any offers for April-loading cargoes for now.

"The fluctuation in flat price is too huge; most plants are not willing to offer," one trader in Singapore said.

But with no immediate end to the conflict, concerns about the availability of feedstock naphtha as well as butane are rising. One South Korean MTBE producer said, with naphtha supplies being hit, they may have to turn to imports. Domestic demand is on the rise, but producers are unable to raise run rates due to rising feedstock costs, which are denting profitability, the same producer said.

Meanwhile, in China, some domestic MTBE producers are also considering cutting operations. Though no producers had confirmed cutting run rates, one Chinese broker expected some of the larger producers to slash run rates, and others may follow too.

Supply impact to watch

The US–Iran conflict could have knock-on effects across the broader Middle East market, due to the disruption in the Strait of Hormuz, a key transit route for cargoes to Asia, according to CERA analysts, S&P Global Energy.

The Middle East exported 133,896 mt of styrene to China, representing 56% of the country's total styrene imports in 2025, S&P Global Market Intelligence's Global Trade Atlas data showed. Saudi Arabia and Kuwait are the two main styrene suppliers within the region.

According to S&P Global Energy analysts, the Middle East accounts for over 20% of global styrene trade, all of which passes through the Strait of Hormuz, primarily feeding Indian and European import markets.

"Recent geopolitical developments in the Middle East are likely to affect styrene exports from the region," a Northeast Asia-based styrene producer said.

The region also exported 179,444 mt of benzene to China, accounting for 3% of the country's total benzene imports, according to Global Trade Atlas data. The majority of benzene from the Middle East has been supplied by Oman and Saudi Arabia.

Paraxylene exports bound to China from the Middle East totaled 220,530 mt in the same year, accounting for China's 2.30% of total PX imports, Global Trade Atlas data showed.

The Middle East has a combined production capacity of around 3,202,000 mt/year of styrene, according to estimates from S&P Global Energy Horizons data.

At present, no aromatics units are known to be directly impacted by the conflict, the analysts added.