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ADNOC resumes exports of naphtha via an alternative route to Oman, traders claim

The price of Asia's naphtha fell to its lowest level since early March, as the Abu Dhabi Oil Company (ADNOC), resumed exports via the Omani port in Sohar. This could provide an alternative supply route, which would ease the supply shortage caused by the U.S./Israeli war against Iran.

ADNOC stopped exports of around 1 million metric tonnes per month of petrochemical feedstock to its Ruwais Refinery in April, after the war curtailed shipping via the Strait?Hormuz.

Last month, the United Arab Emirates producer resumed its exports by using tankers to transport cargoes to the?refinery within the Gulf and then transferring them onto other tankers in Sohar port to export to Asia. This process is known as ship-to -ship transfers.

ADNOC has devised a workaround that allows buyers who are reluctant to take the risk of ships crossing through the Strait to receive more oil products.

Shipping data showed that two of these tankers, Minerva Pisces, and Torm Gwyneth?loaded naphtha on ADNOC vessels in Sohar around May 30 and are headed to Asia.

The traders said that more tankers could have loaded ADNOC Naphtha through Sohar. However, shipping data may not reflect all vessel movements.

ADNOC's spokesperson stated that "We don't comment on the positions, movements or routes of our vessels because it is against policy".

NAPHTHA PRICES TUMBLE

Prices for Naphtha The price of crude oil in Asia has risen to an all-time high of $1,300 per metric ton. In March, the price of Brent crude rose to a new record high of $467 per ton after the war cut off supplies from the Gulf region. This region accounts for over?half the Asian imports.

On Tuesday, Asia’s benchmark naphtha for delivery in second half of July dropped to $788 per ton. The margin meanwhile slipped to about $84 per ton.

Insufficient feedstock supplies are causing widespread run-cuts and force majeures at petrochemical plants in Asia.

The International Energy Agency predicts that global?naphtha consumption will fall by 80,000 barrels per day this year to 7,136 million bpd.

A trader in India said that naphtha is unlikely to reach its peak levels of March because the demand for the product has already been weak, and the market doesn't expect any further cuts to supply from the Gulf. Reporting by Mohi Nrayan, Editing by Florence Tan & David Goodwin

(source: Reuters)