August Pricing Analysis - Asia & Middle East Light Ends

SUMMARY

August 2026 saw a partial unwind of July's Hormuz-driven spike. Products prices were driven by crude price movement which eased early in the month on prospects of a US-Iran interim deal. However, temporary ceasefire framework's 60-day deadline expired on 17-Aug and heightened regional tension into month-end led to price spike. Freight rates became an important factor for delivered cargoes prices, with clean freight surging while VLGC freight remained elevated. Short supply of vessels’ positions and Panama Canal congestion are pushing up these freight rates and expected to remain elevated in September.

Gasoline Singapore FOB 92 RON firmed to a $110.80/bbl full-month average (+3.9% MoM, +42.3% YoY), rising from $108.37/bbl at the open (3-Aug) to $118.43/bbl at the close (31-Aug). The gasoline crack vs Dubai crude collapsed from $29.99/bbl in July to $21.95/bbl in August as crude outpaced product gains through the month.

Naphtha Japan CFR eased to a $791.98/MT average (-1.1% MoM) but held a 36.3% YoY gain. The Singapore FOB and Middle East Gulf FOB LR1 benchmarks softened further on a monthly-average basis (-1.6% and -7.7% MoM respectively). The Japan CFR Naphtha vs Dubai crack was at +$6.93/bbl on 3-Aug but hovered closer to zero and ended the month at +$1.41/bbl (31-Aug).

Propane FE CFR rallied to a $745.51/MT average (+7.9% MoM, +43.3% YoY). The FE premium over Middle East CP swaps widened from $90.25/MT to $150.00/MT over the month. The September CP was announced 31-Aug at propane $625/MT and butane $660/MT, up $5 and $20 from the August CP (propane $620/MT, butane $640/MT).

MARKET ACTIVITY

GASOLINE

• Gunvor Singapore was the dominant buyer of Mogas 92 (100kb) FOB Straits cargoes, taking 7 of the 13 outright trades cleared over the month. Reliance Global Energy Services bought 2. Sellers were PTT International Trading (8), Aramco Trading Singapore (3), and TotalEnergies Trading Asia (2)
• Gasoline Singapore FOB 92 RON's prices firmed from $108.00/bbl (3-Aug) to a $113.00/bbl high (25-Aug), last trading at $112.20/bbl (27-Aug), with a wide bid-offer gap opening mid-month before liquidity returned in the final week
• Window activity was heavily towards buyers all month (145 bids logged vs 50 offers)

NAPHTHA

• Physical liquidity stayed thin, with only five outright trades clearing over the month despite more offers and bids on the window this month (73 offers, 50 bids)
• BP Singapore was the dominant buyer, taking three of the five cleared cargoes: $819/MT from Vitol Asia (11-Aug), $802/MT from ADNOC Global Trading Asia (18-Aug), and $830/MT from Vitol Asia (24-Aug)
• TotalEnergies Trading Asia bought the month's final two cargoes, $810/MT (26-Aug) and $823/MT (27-Aug), both from ADNOC Global Trading Asia
• Vitol Asia (35 offers) and ADNOC Global Trading Asia (28 offers) were the two active firms offering all month, together accounting for the large majority of the window's offer flow
• Heavy naphtha stayed firm on seasonal summer demand for gasoline and therefore blending components
• South Korea's Ministry of Trade, Industry and Resources (MOTIE) extended its emergency naphtha export controls through 26 Jan 2027. It first adopted the export controls in March this year for a five-month period in response to war in the Middle East. The extension will keep near term Korean naphtha export limited. Regional buyers expected to continue rely on European and Mediterranean arbitrage cargoes.

LPG

• Window activity for the CFR Japan propane cargo stayed heavily bid-skewed (53 bids vs 7 offers), resulting in four trades for the month
• AB Commodities (13), BB Energy Asia (9), Vitol (7) and Glencore (5) were the most active bidders through the month
• Petrochina Singapore bought a 46KT 2H September cargo from Vitol at Aug FE -$1/MT (7-Aug); Unipec bought a 23KT 2H September cargo from Trafigura at Sep FE +$29/MT (18-Aug)
• TotalEnergies bought a 23KT 1-7 Oct cargo (basis Daesan, non-Targa origin) from BWPS at Oct FE +$56/MT (27-Aug)
• Satellite International bought a 23KT 1H October cargo from BWPS at Sep FE +$12.15/MT (27-Aug)
• Participants shifted focus from H2 September to H1 October discussion as the month progressed, leaving early-month assessment dates comparatively muted
• Saudi Aramco asked term buyers to lift LPG from inside the Middle East for the first time in six months following Juaymah repair completion, though news of actual lifting remained thin given the regional tension.

PRICE ACTION

Gasoline Singapore 92 RON: Full-month avg $110.80/bbl (+3.9% MoM, +42.3% YoY), +9.3% open-to-close ($108.37 to $118.43/bbl). Monthly high $118.43/bbl (31-Aug), low $100.29/bbl (5-Aug).

Naphtha Japan CFR: Full-month avg $791.98/MT (-1.1% MoM, +36.3% YoY), +9.7% open-to-close ($782.50 to $858.00/MT). Similar to gasoline trend, monthly high $858.00/MT (31-Aug), low $713.73/MT (5-Aug).

• The crack vs Dubai crude dipped negative on 21-Aug (-$5.20/bbl), its first negative print since 16-Jun, then recovered to close the month at +$1.41/bbl (31-Aug). Naphtha price decoupling slightly from crude’s move on W4 resulting in slight recovery of naphtha’s crack.

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Propane FE CFR: Full-month avg $745.51/MT (+7.9% MoM, +43.3% YoY), +14.5% open-to-close ($719.00 to $823.50/MT). Significant increase in Asia LPG prices this month with monthly high $823.50/MT (31-Aug), low $688.75/MT (5-Aug).

• The rally built steadily through the month rather than in a single spike, with each week posting a positive WoW gain, in contrast to July's early-month crash and recovery pattern.

Asia & ME Light Ends Price Action | General Index

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• The September CP was announced 31-Aug at propane $625/MT and butane $660/MT, up $5 and $20 respectively from the August CP (propane $620/MT, butane $640/MT). Butane rose more sharply than propane on tighter butane availability. September CP price set within market expectations.
• China PDH operating rates slipped closer to low 70% from a roughly 75% July average. Market considers this level healthy and no news of upcoming turnaround heard.

CROSS-MARKET DYNAMICS

• Gasoline 92 RON crack vs Dubai: opened $27.38/bbl (3-Aug), closed $23.44/bbl (31-Aug), a 26.8% MoM compression from July's $29.99/bbl average. Crude outpaced product gains through the month even as outright gasoline firmed
• Naphtha Japan CFR crack vs Dubai: opened +$6.93/bbl (3-Aug), dipped negative from 21-Aug for the first time since 16-Jun, and recovered to close the month at +$1.41/bbl (31-Aug)
• 92 vs 95 RON octane spread: held at $3.26/bbl and stepped up to $3.97/bbl from 20-Aug ending with a monthly average $3.62/bbl, upward move of +21.9%. Reformate and MTBE remained scarce and expensive, tightening high-octane blending component availability during the last stretch of summer demand.
• Middle East CP Propane/Butane swaps spread (CP C3/C4) remained mostly rangebound around -$20.00/MT to -$25.00/MT before Aramco CP announcement marking CP C3/C4 spread at -$30.00/MT on 31-Aug.

CROSS-REGIONAL DYNAMICS

• Gasoline E/W spread (Eurobob NWE swaps vs SG 92 RON swaps): widened sharply from +$8.78/bbl (3-Aug) to +$27.09/bbl (28-Aug). The move was driven almost entirely by Eurobob's own rally (+$27.23/bbl), against a comparatively modest Singapore gain (+$8.93/bbl).
• Propane NWE CIF swaps vs Propane Far East CFR swaps: NWE's discount to delivered Far East widened from -$165.00/MT (3-Aug) to -$201.00/MT (28-Aug). Far East propane price gained outpaced NWE's gains into month-end (+15.8% vs +13.7%).
• Propane FE CFR vs Middle East CP swaps spread: widened from $90.25/MT (3-Aug) to $150.00/MT (28-Aug), a fresh monthly high on the final trading day. Sustained Far East demand pulled the FE flat price premium wider against Middle East values. Saudi Arabia's Yanbu terminal loading drop from previously heard 7-8 cargoes to around 5-6 cargoes. News of security risk transiting through Red Sea heard around late July to early August impacting LPG market, adding further support to the FE premium over Middle East CP price.
• LPG Freight: US Gulf-Japan freight (BLPG3) held broadly rangebound but remained high. Freight easing from $272.67/MT (3-Aug) to a $254.17/MT low (7-Aug), rallying to a $287.17/MT high (11-Aug), then easing back to $265.08/MT (31-Aug, -2.8% vs open) Middle East Gulf-Japan freight (BLPG1) firmed from $213.00/MT to a $223.00/MT peak (25-Aug) before easing to $217.75/MT (31-Aug, +2.2% vs open) Panama Canal Northbound auction slots were awarded at a record $5.3m paid by SK Gas for a single Neopanamax Northbound transit (25-Aug); Panama transit waiting times were heard at 7-11 days for unreserved vessels in August. Many shipowners continued rerouting via Cape of Good Hope, adding roughly 20 days to voyage duration. High freight meant LPG market faced structurally closed US-Asia arb.

CURVE STRUCTURE

Gasoline SG 92 RON Swaps‍

An upward shift with modest steepening across the curve, not a pure parallel move.

Naphtha Japan CFR Swaps

The front held broadly steady while the back end steepened sharply into month-end.

Propane FE CFR Swaps

Backwardation steepened even more sharply than naphtha's, widening the FE propane curve's lead over the naphtha back-end move. FE propane timespread (M0/M1): opened $37.25/MT (3-Aug), rallied to $43.00/MT (11-Aug), sold off to $20.00/MT (21-Aug), and recovered to $27.00/MT by month-end (28-Aug).

PRICE VOLATILITY

• Naphtha, gasoline and propane recorded their lowest coefficient of variation of the six-month window in August; butane's 4.44% was a close second-lowest, just above April's 3.83% low
• Naphtha and gasoline both eased from July's re-acceleration (12.52% and 9.76% respectively) back toward the calmer April-May range, consistent with the partial de-escalation in Hormuz risk through early August
• Propane and butane volatility also compressed sharply from July, despite the FE/CP spread widening materially over the month — the outright flat price move was comparatively orderly even as spread relationships shifted

SOMETHING TO WATCH

• Late-August US-Iran Escalation: The U.S. struck Iran overnight on 31-Aug, including Larak Island, with immediate Iranian retaliation; separately, the UAE suspended financial ties with Iran and Russian Black Sea export volumes fell. Iran-Oman talks yielded a phased framework for a temporary 7-mile Hormuz transit corridor and joint mine-clearing, but Iranian officials stressed this is not a full reopening — commercial transits stayed at single-digit percentages of pre-war norms, with producers still relying on ship-to-ship transfers near Sohar/Fujairah. Watch for the crude and freight response when September assessments resume.
• Panama Canal Capacity Cuts: Panama Canal Authority Chief Ricaurte Vásquez confirmed El Niño-driven drought is intensifying bottleneck pressure. Neopanamax locks will be limited to 9 slots per day from 3-Sep, with Panamax locks cut from 25 to 23 slots per day from 15-Sep. More VLGCs may opt for longer route such as the Cape of Good Hope, keeping the vessel availability tighter as they are stayed on sea for longer period.
• Sanctions Risk: OFAC added Singapore-based commodities trader Wellbred Capital to its sanctions list on 25-Aug over ties to an Iran-linked oil shipping figure, with a grace period specified to sever Iran ties. China has historically been a major buyer of Iranian LPG, and market participants flagged the risk of Chinese retaliation as a fresh source of uncertainty.

Note: All figures, prices and market activity referenced in this report are based on the period covered by this monthly update.

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