The market for a key component in the production of gasoline is about to get tighter in Europe.
Russian- world’s top supplier, exports of naphtha to Europe have reached multiyear low as countries and companies shun the nation’s oil flowing its invasion of Ukraine.
The petroleum product is used to make goods from fuel to plastics. Now, as the summer approaches and petrochemical plans return from maintenance – demand for naphtha is expected to soar.
“Ultimately, there is some risk from a Russian shortfall in naphtha,” said Joseph McDonnell, an oil products analyst at Energy Aspects Ltd as reported by Bloomberg.
“Russian barrels will continue to flow into Europe,” he added. “But where buyers have self-sanctioned they will turn to the US, Algeria, Norway and other incremental suppliers to meet their buying requirements, and total Russian supply into Europe is a big gap to fill.”
