Asia Benzene Jumps Nearly 8% as Iran Crisis Roils Feedstock, Freight Markets
Benzene spot prices in Asia surged nearly 8% on Monday as oil futures rallied and market participants sought to digest the risk of a broadening conflict in the Middle East, raising fears of prolonged disruptions to crude, naphtha and gas supply.
An April-loading cargo changed hands at $883/mt FOB Korea, up $57/mt from Friday’s transaction levels, as buyers scrambled to secure prompt barrels. The spike followed sharp gains in energy markets after U.S. President Donald Trump said a war with Iran could last four to five weeks, amplifying concerns over feedstock flows from the Middle East.
The escalation between Israel and the U.S. against Iran has sparked fears that shipments of naphtha and condensate from the Gulf could be curtailed. Market participants said no naphtha cargoes were currently being shipped out of the Middle East, with traders exploring alternative routes via the Cape of Good Hope. While some naphtha players expect Iran’s declared closure of the Strait of Hormuz to last less than a month, they estimate as much as 2 million mt of March-loading naphtha out of a typical 4.5 million mt program could be affected.
Asia’s naphtha prices surged almost 11% on Monday, with the midpoint of the OPIS CFR Japan assessment rising to $716/mt from $646/mt on Friday. The jump in feedstock costs outpaced gains in benzene, compressing the benzene-to-naphtha spread by 2.5% to $117/mt, according to OPIS data.
South Korean producers were said to be holding low inventories of condensate and naphtha, though most retain crude reserves as a buffer. If disruptions persist, refiners may turn to Mediterranean and U.S. Gulf Coast cargoes. Some may also trim operating rates to stretch feedstock supplies.
“If feedstock flows don’t normalize soon, refiners will have no choice but to cut runs to preserve inventory,” a Singapore-based trader said. “Margins are already under pressure from higher naphtha, and the freight situation is adding another layer of cost.”
Logistics have emerged as an immediate flashpoint. Shipowners are reportedly avoiding the Middle East Gulf after attacks, sending war-risk premiums and freight rates sharply higher. Port closures at key loadports following Iranian strikes have left vessels stranded, disrupting rotations and tightening prompt tanker availability. Market participants said vessels are likely to avoid the Strait of Hormuz and the Suez Canal, instead lifting U.S. cargoes via the Panama Canal or routing around the Cape of Good Hope — options that extend voyage times and inflate costs.
Prolonged shipping disruptions and supply-chain rerouting could amplify inflationary pressures on product prices. With feedstocks scarce, refiners are expected to prioritize gasoline blending over aromatics production. Widening gasoline-to-blendstock spreads are encouraging Asian refiners to divert streams away from toluene, mixed xylene and paraxylene, potentially curbing benzene supply for petrochemical use.
China’s domestic market has also reacted sharply. Benzene transactions jumped 5.4% on Monday from Friday’s close, with the midpoint of OPIS ex-tank assessments climbing from 6,090 yuan/mt to 6,420 yuan/mt. Sellers continued to lift offers as sentiment turned increasingly bullish.
“The price increase was quite sudden, and we are currently clearing out inventory,” said a China-based trader. “If downstream keeps buying at this pace, the tightness could accelerate.”
Contrary to earlier expectations of a gradual post-holiday recovery, downstream plants in China — including caprolactam, phenol and styrene units — have ramped up rapidly following Spring Festival cutbacks, with some operating at or near full capacity. Production levels for several derivatives have reached record highs, boosting spot benzene demand.
Further support came as Sinopec raised its domestic benzene list price by a total of 450 yuan/mt to 6,600 yuan/mt ex-warehouse by Tuesday, equivalent to about $826/mt CFR China on an import-parity basis. The hike, one of the steepest this year, reinforced bullish sentiment. Market participants expect a drawdown in east China inventories this week after stocks stood at 175,500 mt last week.
Supply risks remain in focus. The Middle East accounts for 4.867 million mt/year of benzene capacity and 3.131 million mt/year of styrene monomer capacity, according to Chemical Market Analytics by OPIS. In 2025, China imported 112,755 mt of SM from Saudi Arabia and 21,141 mt from Kuwait, representing 47.5% and 8.91% of total SM imports, respectively, according to Global Trade Tracker data. On the benzene side, China received 67,542 mt from Saudi Arabia and 111,901 mt from Oman, equivalent to 1.2% and 2% of total imports.
While China’s direct benzene reliance on the Middle East is relatively modest, traders warned that disruptions to SM loadings could more acutely tighten prompt CFR China availability. Indian exports may also be affected by routing uncertainties. India shipped 217,694 mt of benzene in 2025, equivalent to 3.88% of China’s total imports.
For now, Asia’s benzene markets are trading with a pronounced geopolitical premium, as volatility in energy and freight reshapes near-term supply expectations and forces buyers to secure barrels in an increasingly uncertain environment.
“Even though the [price] rally will continue, we are taking a wait-and-see approach,” said the Singapore-based trader. “The Middle East situation might resolve earlier than expected and we do not want to get caught with high-priced cargoes.”
—Reporting by Hazel Kumari, hkumari@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com