Naphtha Set to Lead Singapore’s Product Imports Rebound Amid Low Inventories

Product imports into Asia’s oil trading hub of Singapore are poised to rebound in June — led by naphtha at nearly 40% of the total — and help counter falling inventory levels in the island state, according to shipping data.

Over 35 million bbl of naphtha, jet fuel, gasoil and gasoline and its components are projected to arrive in Singapore this month, 25% higher than the volumes imported in May, data from ship-tracking provider Vortexa shows.

Singapore’s May import volume of 28 million bbl was the lowest since the Iran war started at the end of February, and contributed to falling oil inventories in the country, which sat at 35.5 million bbl as of June 17, according to the latest official data. This was a slight rebound from the 13-year-low of 34.4 million bbl set the previous week, following four consecutive weeks of drawdowns.

Unusually for Singapore, naphtha is set to become its largest product import in June, accounting for 38% of the country’s total product imports. In absolute terms, the almost 14 million bbl of naphtha set to arrive in Singapore this month — if all planned shipping fixtures materialize — would be the highest in at least 10 years.

Russia is set to become Singapore’s single largest source of June’s naphtha imports, accounting for around 38%. If all shipments arrive on time, the island state’s naphtha imports from Russia in June would also be a record high. The 3.8 million bbl already confirmed for the month is the fourth highest in the last 10 years, around 0.5 million short of the record high seen in January 2023.

Asia’s petrochemical industry, including in Singapore, has reacted to feedstock disruptions wrought by the Iran war with a series of cracker run cuts and force majeures at downstream plants. The lifting of these constraints following a meaningful Iran-U.S. peace deal would present a ready source of naphtha demand, trading sources said.

Singapore is not a major naphtha exporter, although volumes have been creeping up since the Iran war started, particularly shipments to northeast Asia. The 1.74 million bbl of naphtha Singapore exported to that region in May is the highest since July 2023.

Gasoline, which typically accounts for 40%-50% of Singapore’s product imports, is the only product whose import volume is expected to fall in June.  Around 11 million bbl is expected to arrive this month, accounting for just 31% of total product imports and 16% lower than the previous month. Lower imports from India and Europe contributed to the fall, shipping data show.

Gasoil imports into Singapore are meanwhile expected to surge by over 60% in June to 10.4 million bbl, aided by higher imports from within the region. Fixtures showed a shipment from the U.S. landing in Singapore in June, marking the first such cargo since the Iran war started.

Singapore’s product imports last increased on month in March, as OPIS reported, which led to increases in its onshore inventories. Oil stocks around the world have however fallen significantly since, raising supply concerns in the absence of a meaningful revival in oil outflows through the Strait of Hormuz.

—Reporting by Hanwei Wu, hwu@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com