Asia’s Oil, Refined Prices Jump on Israel-Iran Conflict
Oil and refined product prices rose in Asia on Friday amid heightened levels of uncertainty following Israel’s attacks on Iran’s nuclear facilities.
Israel struck dozens of targets in Iran on June 13 at the start of what could be a fresh region-wide conflict in its attempt to prevent Tehran from building an atomic weapon.
By 9 a.m. Singapore time, July West Texas Intermediate was trading nearly $6 higher at $73.94/bbl after hitting $74.04/bbl in the last few minutes, as previously reported by OPIS. Fears of Iranian retaliation pushed Brent crude prices to $74.69/bbl in Asia on Friday 10 a.m. Singapore time, the highest since April 1, 2025, when it reached $74.79/bbl, according to broker data.
LPG, Naphtha Spikes; Gasoline Cracks Fall
Far East propane swaps for June opened at around $580 per metric ton on Friday 9.30 a.m. Singapore time, a jump of $35/mt from Thursday’s close, according to OPIS data. The Asia 92 RON gasoline swaps for June likewise experienced a spike of $5.43/bbl from $77.60/bbl in the previous session.
The 92 RON crack spread, however, fell to around $7.386/bbl from $10.484/bbl in the previous session, reflecting crude’s dominance in this gasoline price rally.
In naphtha, the CFR Japan July swap surged to $616.25/mt as of 7.30 a.m. Singapore time, jumping as much as 6% from $579/mt one day before, supported by crude strength, according to OPIS data.
Sources expressed concerns over the potential risk that Iran could choke the Strait of Hormuz amid escalating geopolitical tensions, disrupting crude and naphtha supplies to Asia. While most of Iran’s naphtha cargoes are bound for the United Arab Emirates, China is the main recipient of its crude exports. A potential crude shortfall could force China to scour global markets for alternative supplies, driving up crude and product prices across Asia.
“It’s still too early [to say], but any future escalation would certainly firm up the market,” an industry source said, citing the additional war risk premium.
“I didn’t see any immediate impact on the physical naphtha market yet, but premiums will definitely be strengthened for a while,” another source said.
Elevated naphtha prices could further erode downstream ethylene profit margins, at a time when the petrochemical sector is already under mounting pressure from subdued demand, sources noted.
Middle Distillates, Fuel Oil Swaps up on Four-Month High
Meanwhile, Asia’s jet fuel and gasoil front month swaps surged by 8.7% to 8.8% as of 11 a.m. Friday Singapore time to $89.61/bbl and $91.73/bbl, respectively — levels last seen in February this year. The crack values for both products saw smaller bumps of 1.3-2.0% to $14.88/bbl and $16.23/bbl for jet fuel and gasoil, respectively, their highest since late May.
The movements were a strong indication that bullish middle distillate prices were reacting more to crude price developments rather than any fundamental changes in the middle distillate market, for now.
Fuel oil swaps surged to their highest levels since Feb. 25, with the June 380CST fuel oil swap for the balance month soaring nearly 7% to $477.16/mt on 10 a.m. on June 13 Singapore time, up from $446.25/mt at Thursday’s 4:30 p.m. Singapore close, based on OPIS data. Similarly, the June 0.5% very low-sulfur fuel oil swap rose 5.7% to $537.05/mt from $508.25/mt over the same period.
Freight rates for transporting 80,000 mt of fuel oil from the Middle East Gulf to Asia are expected to rise from Thursday’s lump-sum rate of $1.57 million, as shipowners assess potential increases in insurance premiums and war risk charges. An increase of over 10% would not be a surprise, a shipbroker said.
Toluene up, Phenol to Track Benzene
On the petchem front, Asia’s toluene prices rose in the Friday morning trading session with July bids and offers ranging between $710-770/mt FOB Korea amid news of Israel’s strikes. Most market participants remain cautious, but anticipation of further crude-led price gains saw some buyers and sellers emerging to negotiate for July cargoes. OPIS last assessed Asia toluene prices at $684/mt FOB Korea on Thursday.
Meanwhile, the direct impact of crude prices on phenol prices is expected to be limited as they are more likely to track feedstock benzene prices in the short run, said Terence Peh, Singapore-based Associate Director at Chemical Market Analytics by OPIS. “New supplies entering the market will have more of an impact on phenol,” he added.
“We think there would be [an] impact on the price setting,” said a Northeast Asian phenol trader. “So far today, spot benzene price has risen by around $30/mt from yesterday, and further increase[s] will depend on how the Israel-Iran conflict unfolds. For now, all phenol market participants have put spot discussions on hold.”
As for shipping, general markets are likely to tighten given higher risk premiums and freight rates when shipping to the Middle East Gulf, a market source said.
“FOB Middle East Gulf supply could be disrupted if the conflict extends, but it remains to be seen if the jump in product prices are just knee-jerk reactions in the market,” an analyst said.
“I think traders will wait to see if there are further escalations over the weekend,” the analyst added.
–Reporting by Thomas Cho, tcho@opisnet.com; John Koh, jkoh@opisnet.com; Kite Chong, kchong@opisnet.com; Yiwen Ju, yju@opisnet.com; Serena Seng, sseng@opisnet.com; and Trisha Huang, thuang@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com