Asia’s Cracking Volumes Fall Amid Mideast Conflict: OPIS Poll
April cracking volumes across Asia’s flexible crackers are set to plunge as escalating Middle East hostilities have disrupted feedstock supply and prompted a wave of force majeure declarations by petrochemical firms across the region, according to the latest monthly OPIS cracking survey concluded on Tuesday.
April’s planned cracking volumes were estimated at 199,000 metric tons of propane and 112,000 mt of butane, down from March’s planned volumes of 237,400 mt of propane and 123,600 mt of butane.
Actual February cracking volumes came in lower at 261,300 mt of propane and 143,900 mt of butane.
Conflict Disrupts Feedstock Supply Chain
Cracker operators said the Middle East conflict has caused shipping disruptions and delays at the Strait of Hormuz, tightening LPG feedstock supplies to Asia.
The Middle East is one of Asia’s key LPG suppliers alongside the U.S. In 2025, Asia imported 46.69 million mt of LPG from the region, according to data from Vortexa.
However, Middle East LPG exports to Asia are currently estimated to fall to 1.83 million mt in March, down sharply from 3.63 million mt in February, the same data shows.
“March loading cargoes have already been cancelled. April may not see cargoes either as vessels are unwilling to transit the area due to the risks. The conflict has disrupted the entire petrochemical supply chain, from shipping and logistics to port operations,” one cracker operator said.
Many cracker operators were heard to be cutting operating rates or declaring force majeure on deliveries amid feedstock supply disruptions.
Analysts said South Korean crackers have already begun trimming operating rates by 5 to 20 percentage points, with Yeochun NCC declaring force majeure on petrochemical product deliveries last Wednesday.
Across Asia, other flexible cracker operators that have declared force majeure include Formosa Petrochemical Corp. in Mailiao and SCG Chemicals in Thailand.
“With supply uncertainty and price volatility, market participants are largely staying on the sidelines. Trading activity has been very limited, and crackers are unlikely to maintain normal production levels,” one analyst said.
High Costs of Alternative Supply
While alternative U.S. supply remains available, the supply shock triggered by the escalating conflict has pushed cargo prices sharply higher, discouraging producers from securing replacement volumes.
Following U.S.-Israel strikes on Iran on Feb. 28, the CFR Japan LPG flat price surged to $734/mt in the trading session on March 2, jumping $110/mt from the previous session. Prices have since continued climbing into the high $700s–$800s/mt range, closing at $781/mt on Tuesday, up from $570/mt a month earlier.
Similarly, the CFR Japan naphtha flat price rose alongside crude to close at $842/mt on Tuesday, up from $584/mt a month earlier.
“It doesn’t even matter which feedstock is cheaper now — LPG or naphtha. No one in the market is buying anymore as both are too expensive,” another cracker operator said.
Shipbrokers also observed some cargoes initially destined for the Middle East being rerouted via the Cape of Good Hope toward the U.S., though many buyers have instead opted to withdraw from contracts altogether.
In addition to higher cargo prices, shipments from the U.S. to Asia involve longer voyage times and elevated freight costs, further dampening buying interest.
Sources added that despite a widening U.S.-Asia arbitrage as Far East prices rise, weak demand in Asia could still limit cargo flows into the region.
Operators Adopt Wait-and-See Approach
Cracker operators are now adopting a wait-and-see stance as they seek greater clarity before committing to purchases or production plans. Market participants expect cracking volumes to decline further in the coming months if the conflict persists and existing feedstock inventories are gradually depleted.
“The Middle East conflict has triggered uncertainty around shipping and pricing. For now, we have no plans for any cracking volumes in April due to these disruptions,” a Southeast Asian producer said.
Market participantsare now watching to see whether shipping flows through the Strait of Hormuz will stabilize.
Methodology: OPIS, a Dow Jones company, collects Asia-based petrochemical companies’ feedstock consumption plans for the current and next month, as well as actual consumption in the previous month. OPIS contacts feedstock procurement officers for the survey by phone, email or messages in the last week of the previous month or the first week of the current month. OPIS may use proxy data based on the best market information available for minor missing entries due to non-response by a stipulated deadline. Such proxies should not alter the overall trend or deviate from the general behaviors of most participants.
—Reporting by Cheryl Lee, clee@opisnet.com and Yiwen Ju, yju@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com