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Market Chatter: Adnoc Restarts Naphtha Exports Via Oman Route as Asian Prices Retreat

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Adnoc has resumed naphtha exports through Oman's Sohar port after creating an alternative route that bypasses direct shipments through the Strait of Hormuz, Reuters reported Tuesday, citing traders.

The company stopped exporting about 1 million metric tons of naphtha per month from its Ruwais refinery in April after the US-Israeli conflict disrupted shipping through the strait, according to the report.

Instead of sending cargoes directly to customers, Adnoc is first moving naphtha on smaller tankers inside the Gulf before transferring the product onto larger vessels at Sohar for export to Asia.

The new route offers buyers another supply option and helps alleviate concerns about ships transiting the Strait of Hormuz.

Two tankers loaded Adnoc-linked naphtha cargoes near Sohar around May 30 and are now sailing toward Asia, the report added, citing shipping data from traders.

Traders added that more vessels may have loaded Adnoc cargoes through Sohar, although available shipping records do not show every transfer.

Earlier supply disruptions in the Gulf drove Asian naphtha prices to a record $1,300 per metric ton and pushed refining margins to a record $467 per ton above Brent crude, according to the report.

With more supplies reaching the market, Asia's benchmark naphtha price for second-half July delivery has fallen to $788 per ton, while refining margins have dropped to about $84 per ton, the report added.

Shortages of feedstock have also forced petrochemical plants across Asia to cut production rates and declare force majeure at some facilities, putting further pressure on demand.

The International Energy Agency expects global naphtha demand to fall by 80,000 barrels per day to 7.136 million b/d this year.

An India-based trader said weak demand and improving supplies should keep prices below the record levels seen in March.

Adnoc didn't immediately respond to' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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