Oil Markets How has the outlook shifted for LPG and naphtha as macroeconomic uncertainty looms?
May 1, 2025
The podcast delves into the impact of recent tariffs on oil markets, particularly focusing on naphtha and LPG. Experts discuss how these tariffs have caused price drops and influenced demand within the petrochemical sector. The conversation highlights the competitive dynamics of propane and naphtha as producers adapt to economic pressures. Additionally, it tackles the challenges facing the European petrochemical market amid uncertainties and adjusting operational strategies in a shifting global landscape.
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Tariffs Crush Naphtha Prices
- The US-China tariff conflict triggered a sharp crash in naphtha prices, dropping about $150 per metric ton in days.
- Naphtha prices tracked crude oil movements closely, impacting trade flows to China significantly.
LPG Market Hit Hard by Tariffs
- LPG prices also plunged sharply following tariffs, with propane prices falling 34% in just over a week.
- LPG trade flows to China became disrupted, causing market liquidity to tighten and cargoes to pile up at terminals.
Tariffs Pressure Chinese Petrochemicals
- China's petrochemical players face narrow or negative margins due to tariffs increasing costs by 125%.
- Options include switching to naphtha, absorbing costs, or shutting down operations altogether.