Iran and Russia are among the world’s top naphtha suppliers, but international sanctions have made it extremely difficult for South Korean downstream companies to procure light distillates from them. South Korean petrochemical players are putting in a lot of effort to diversify their feedstock naphtha supply sources and they plan to increase shipments from North African suppliers such as Algeria and Tunisia, an official at the Korea Petrochemical Industry Association told S&P Global Commodity Insights. South Korea is Asia’s biggest naphtha importer and typically received around 50 million barrels/year of naphtha from Russia prior to the Russia-Ukraine conflict. The industry would take around 500,000-1 million barrels/month from Tunisia in the first half of 2023, according to trading sources at two major South Korean petrochemical firms. Naphtha demand could trend lower from late in the second quarter as it is possible for LPG prices to become more competitive once the winter and early spring heating requirements fade, according to downstream industry sources.

Source: The North Africa Journal March 17, 2023 10:57 UTC