OIL PRODUCTS: Russian Naphtha Boost to Asia Highlights Refining Recovery

Russian exports of naphtha to Singapore are on track for a yearly high in May, highlighting a recovery in Russian refining capacity according to LSEG and FGE.

• LSEG projects 415,000 metric tons of Russian naphtha will arrive in May while FGE expects nearly 500,000 tons.
• "The refinery (attack) impact wanes off through May and June, which is why we may expect higher exports from Russia," according to an FGE analyst.
• Naphtha imports from Russia into Singapore rose in April to their highest this year at 329,955 tons.
• Rosneft's Tuapse oil refinery resumed processing earlier this month after Ukraine drone strikes.
• Novatek plans to start test operations for a new 3 million metric tons-per-year processing unit at its gas condensate complex in the Baltic Sea port of Ust-Luga in mid-June, which could enable it to increase naphtha exports to between 550,000 and 600,000 tons a month - up from 350,000 to 370,000 tons currently.
• FGE's analysts expect Russian naphtha exports into Asia will reach 1.4-1.5 million tons levels in June, but the risk of more Russian refining capacity being subdued remains especially with an uptick in attacks this month.
• Russian naphtha has flooded the Asian market since European sanctions in February of last year.