UAE, Kuwait Increase Naphtha Exports to Asia

The United Arab Emirates and Kuwait have boosted naphtha exports to Asia in recent months via ship-to-ship (STS) transfers outside the Strait of Hormuz, helping Asian petrochemical producers to increase output, traders and analysts said.

Abu Dhabi National Oil Company (ADNOC) and Kuwait Petroleum Corp (KPC), which accounted for nearly half of Gulf exports before the Iran war, shipped almost 1.6 million metric tons, or about 14 million barrels, of naphtha in August and September, according to shipping data from trade sources.

That compared with around 700,000 tons in March and April, when the US-Iran war upended trade flows.

Both companies exported about 5 million tons combined in August and September 2025, mostly to Asia, Kpler data showed.

"Direct loadings of naphtha from Fujairah comprising re-exports via sea — from Iraq, Ruwais, and Hamriyah — and breakbulk trucked naphtha from other UAE ports have picked up substantially," said Armaan Ashraf, director of natural gas liquids and Asia oil at consultancy FGE NexantECA, referring to smaller quantities transported by road from other UAE ports to Fujairah for export.

ADNOC Maritime International Chartering loaded about 1.5 million tons of naphtha onto 25 vessels in August and September for STS transfers off Sohar, Oman, outside the Strait of Hormuz, trade data showed.

"As a reliable and long-term energy partner, ADNOC remains committed to supporting customers across Asia. We continue to supply naphtha to the region and work closely with customers to meet their requirements while ensuring secure and dependable supply," an ADNOC spokesperson said, without commenting on the volumes.

KPC, by comparison, shipped three cargoes totalling about 180,000 tons, the data showed. The company did not respond to a Reuters email seeking comment.

Actual export volumes from both companies may be higher because many vessels switch off transponders during voyages to reduce the risk of attack.

ADNOC still has scope to increase exports as KPC and QatarEnergy have been slower to restore supplies, one Singapore-based naphtha trader said. This was because QatarEnergy lacked sufficient product tankers, while KPC only began scaling up shipments from September, traders said.

KUWAIT, QATAR EXPORTS LAG UAE

KPC resumed spot naphtha offers to Japan on delivered ex-ship basis in late June after a three-month halt, a buyer said. Recent cargoes for early September delivery were sold at premiums of up to $45 a ton to Japanese benchmarks, he added.

KPC officials said earlier this month they were offering STS options for crude and refined products outside the Strait of Hormuz. Trade data showed these transfers typically take place off Vadinar on India's west coast.

"While we have been seeing more STS activity off West Coast India, Sohar flows have kept steady," FGE's Ashraf said.

A Fujairah-based industry source said the surge in STS activity in the Gulf of Oman had created equipment shortages, forcing some sellers to seek alternative locations.

Last week, QatarEnergy offered up to 75,000 tons of naphtha for loading from Ras Laffan, inside the strait. 

The producer sold a cargo last month at a discount of about $100 a ton to Japanese benchmarks because buyers were unwilling to pay the risk premium associated with sending ships into the war-hit strait, an India-based buyer said.

QatarEnergy is also exploring STS exports of other petroleum products off Vadinar, the buyer added. The company did not respond to a Reuters email seeking comment.

ASIAN CRACKERS RAISE OUTPUT

Improved Gulf supplies have allowed most South Korean and Japanese naphtha crackers to keep utilisation rates above 70% in August and September, up from about 68% in March and April, industry sources said.

Thailand's SCG Chemicals restarted its naphtha cracker in Rayong on September 17 after six months under force majeure. The company is sourcing naphtha from the spot market, including from the UAE, its CEO previously told Reuters.

Disruptions to supplies through the Strait of Hormuz after the US-Iran war pushed much of Asia's petrochemical industry to a near standstill, forcing plants to curb output and buyers to seek scarce replacement cargoes at sharply higher prices.

(Reuters)