CFR Japan naphtha-Brent crack nears 3-month high on tighter supply

The CFR Japan naphtha physical crack spread against front-month ICE Brent crude futures hit a near three-month high of $95.48/mt at the Feb. 10 Asian close, widening $7.55/mt week over week, Platts data from S&P Global Energy show. The spread was last wider at $99.25/mt on Nov. 14, 2025.

Tighter naphtha supplies in March, particularly during the second-half March delivery cycle, have pushed naphtha cracks and cash differentials higher.

Market participants attributed the tighter supply to some regional refinery maintenance and fewer arbitrage cargoes to the East, amid loading delays in the Mediterranean. Furthermore, additional US naphtha is expected to be redirected to Venezuela as a crude diluent.

Algeria expects further disruptions to oil exports in February after bad weather shut ports in late January, a senior official with state-owned Sonatrach told Platts Feb. 5.

Loadings were disrupted by inclement weather in late January, which forced ports to close between Jan. 20 and Feb. 2. Five cargoes of oil products were also delayed in January, while insufficient product storage meant this impacted refining runs. The Skikda refinery operated at 75% of capacity in January, while Arzew was at 97%-98% of capacity. The Algiers refinery did not suffer disruptions and ran at 107% in January, the official said.

Earlier in February, the US issued General License 47, allowing the sale of US diluents to Venezuela, in the latest effort by the Trump administration to ease sanctions on Caracas in the wake of the removal of Venezuelan President Nicolas Maduro.

The new license for US diluents came after the US lifted the bulk of its restrictions on Venezuela's crude oil industry on Jan. 29, allowing oil transactions involving Venezuela's state-owned oil company PDVSA. This could boost US naphtha exports to Venezuela, as naphtha must be blended with Venezuela's heavy crude to facilitate export and transport.

A stronger naphtha market has also propelled the differentials at which spot cargo tenders have been awarded recently.

South Korea's Lotte Chemical bought H2 March delivery cargoes at a premium of $10.75/mt to Mean of Platts naphtha assessments, CFR, with pricing over 30 days before delivery to Daesan and Yeosu, Platts reported Feb. 10. This was more than double the $4/mt premium at which the company had procured its H1 March delivery spot cargoes, with the same pricing period to Yeosu.

Ethylene-naphtha spread

The benchmark C+F Japan naphtha hit a multimonth high of $612.38/mt at the Feb. 10 Asian close, up $14.50/mt, day over day. The benchmark was last assessed higher at $641.75/mt on June 23, 2025.

As a result, olefin margins have been squeezed further, with the CFR Northeast Asia ethylene-CFR Japan naphtha physical spread -- closely watched by petrochemical producers – calculated at $82.63/mt at the Feb. 10 Asian close, according to Platts data. The spread was last lower at $80.25/mt on Jan. 30, 2023.

Several South Korean petrochemical end-users have been considering reductions in run rates as margins deteriorate.

"Crackers are trying to review additional load down due to poor margins, even though they still need to sell," a Northeast Asia-based producer said.

A petrochemical producer based in Southeast Asia said that ethylene was also long in Southeast Asia, so there has not been a lot of incentive to run harder.

Another Southeast Asia-based trader said supply is expected to improve, "so I do not see [price] improvement; more length is likely."