July Pricing Analysis - Asia & Middle East Light Ends

SUMMARY

July 2026 marked a sharp re-escalation of the Hormuz risk premium, the mirror image of June's unwind, as the fragile US-Iran ceasefire collapsed in early July and hostilities intensified through mid-month. Prices peaked around 22-24 Jul before a partial pullback into month-end, with a further escalation (Saudi Arabia joining US strikes in Iraq) breaking on 28-Jul.

Gasoline Singapore FOB 92 RON was flat MoM at a $106.66/bbl full-month average, though the monthly figure masks a sharp V-shape: prices fell to $94.29/bbl (10-Jul) before rallying to $124.43/bbl (23-Jul) and easing back to $114.93/bbl by 31-Jul. This volatility was shaped by competing forces: on July 8, trade sources reported that Chinese refiners planned to export roughly 3 million metric tons (25.5mn bl) of clean petroleum products (gasoline, diesel, and jet fuel combined) for the month of July after Beijing lifted export restrictions, which helped push against the mid-month Middle East escalations that aggressively pushed crude and refined products higher together.

Naphtha Japan CFR surged 27.2% open-to-close to $840.00/MT (31-Jul), the standout mover of the month, driven by surging crude benchmarks, acute Middle East supply tightness from escalating regional conflict, and surging East-West transportation costs that severely restricted arbitrage inflows from the Mediterranean.

Propane FE CFR rallied 20.1% open-to-close to $716.50/MT (31-Jul), reversing a large share of June's Hormuz-unwind selloff. Middle East CP Propane and Butane both crashed over $100/MT on 2-Jul, rallied into a 24-Jul peak, then softened into month-end. See Price Action for the full-month averaging effect.

MARKET ACTIVITY

GASOLINE

• Vitol Asia dominant buyer across 92 RON, 95 RON and 97 RON as the Hormuz rally pulled fresh coverage into the window: 24 trades cleared, 18 to Vitol Asia, with sellers being PTT International (11), SK Energy International (10), TotalEnergies (1), Gunvor (1), and Aramco Trading Singapore (1)
• Gasoline Singapore FOB 92 RON's prices firmed from $94.20/bbl (2-Jul) to $115.20/bbl (31-Jul). Last trade of the month was between Vitol Asia and Aramco Trading Singapore.
• Gasoline Singapore FOB 97 RON activity accelerated into month-end: 53 bid/offer entries across the month, but only 2 trades cleared, both on 21-Jul at $121.20/bbl and $116.20/bbl respectively. Vitol Asia was the only company bidding for 97 RON cargoes.

NAPHTHA

• Physical liquidity ran thin throughout the month and fell to zero in the last week of July. No trades cleared after 24-Jul.
• ADNOC Global Trading Asia was the sole seller across both mid-month outright deals, $836/MT to TotalEnergies (15-Jul) and $797/MT to BP Singapore (16-Jul), suggesting the Middle East producer had managed to move some volumes through the Strait of Hormuz
• Trafigura sold the month's highest print, $998/MT to Vitol Asia on 24-Jul, the trade behind the mid-month spike
• Overall July was defined by limited physical buying as Asian buyers took a wait-and-see approach. Speculation percolated that Chinese crackers may plan shutdowns in August or September amid deep negative cracker margins persisted.
• Soaring naphtha costs pushed Chinese and South Korean petrochemical makers to maximize LPG cracking.

LPG

• A total of 91 bids/offers/trades for July (70 bids, 17 offers) but resulted in only four trades.
• AB Commodities, Gunvor, and PetroChina Singapore were the most active bidders (12 each). Oriental Energy (7 offers) was the main seller for the month.
• Unipec Singapore bought two lots at Aug FEI+22 (2-Jul), one from Thailand's PTT and one from E1. Oriental Energy sold to SK Gas at Aug FEI+18 (9-Jul). BWPS sold to Wanhua at Aug FEI+22 (14-Jul). No trade done in the second half of July, consistent with thin trading interest. Chinese importers remain sensitive to the month-end price hike and are awaiting clearer market conditions before inquiring on cargoes for September delivery.
• Carib LPG joined as new market participants in the final week.
• Spot tenders dropped off into month-end with cancellation over higher than expected offers. KPC continued to sell multiple DES cargoes throughout the month.

PRICE ACTION

• Gasoline 92 RON:
  
  • ‍ Prices rose 19.1% open-to-close ($96.46 to $114.93/bbl). Full-month avg $106.66/bbl (-0.9% MoM, +36.9% YoY). Monthly averages for June and July are nearly flat, masking a sharp swing in each: June sold off through the month while July opened weak and rallied hard into the 23-Jul peak.
  • The month's swing traced two overlapping drivers: Beijing's 8-Jul export-restriction reversal weighed on the front half, while the mid-month Middle East escalation overwhelmed that bearish sentiment and pulled the whole complex higher into the 23-Jul peak.

• Naphtha Japan CFR: +27.2% open-to-close ($660.50 to $840.00/MT). Full-month avg $800.47/MT (+13.6% MoM, +37.4% YoY). Singapore FOB and Middle East Gulf FOB LR1 posted even larger MoM gains (+17.9% and +20.8% respectively)
  
  • The outperformance versus gasoline reflects a narrower, product-specific squeeze: reports that Chinese refiners were maximizing gasoline yield at naphtha's expense structurally reduced domestic naphtha supply just as Middle East cargo availability tightened. Traders in Singapore pulled back buying interest towards the second half of the month as flat prices rallied, having covered their physical requirements by then.

• Propane FE CFR: Prices rise 20.1% open-to-close ($596.75 to $716.50/MT). Full-month avg $691.08/MT (+1.7% MoM, +32.8% YoY). Middle East CP Propane and Butane both crashed over $100/MT on 2-Jul, rallied into a 24-Jul peak ($594.75/$620.75), then eased back to $542.25/$562.25 by 31-Jul, closing above where they opened.
  
  • The 2-Jul crash and subsequent recovery reflects the CP benchmark repricing sharply lower before confirmation of physical tightness, then catching back up as the Hormuz conflict escalated through the month — the full-month average is distorted by that single early crash even though the underlying trend through July was firmly higher.
  • August CP announced on 30-Jul at propane $620/MT and butane $640/MT, both up $40/MT (July CP: C3 $580/MT, C4 $600/MT). Saudi Aramco continues to cancel Ras Tanura term acceptances for August loadings.

CROSS-MARKET DYNAMICS

• Gasoline 92 RON crack vs Dubai: opened $30.17/bbl (1-Jul), closed $33.13/bbl (31-Jul) — the geopolitical spike ultimately outweighed Beijing's export-driven margin pressure, widening the crack through the month
• Naphtha Japan CFR crack vs Dubai: opened +$7.92/bbl (1-Jul), closed +$12.58/bbl (31-Jul), remains positive all month since 16-Jun when it first crossed into positive territory
• 95/92 RON octane spread: widened from $2.05/bbl (1-Jul) to a $4.00/bbl peak (24-Jul). The inter-RON spread eased to $3.30/bbl by 31-Jul, but still well above the June range as premium-grade demand held firmer through the rally than standard-grade supply
• Propane FE CFR swaps vs Naphtha Japan CFR swaps: propane discount to naphtha swaps deepens from -$80.00/MT (1-Jul) to -$94.00/MT (31-Jul). The spread extended past the feedstock-switching trigger of -$50/MT, peaking wider at -$122/MT around July 24 before narrowing and subsequently widening again toward the end of the month as naphtha markets tightened faster than propane through the conflict-driven rally
• Middle East CP Propane/Butane swaps spread (CP C3/C4): started at -$3.00/MT (2-Jul) and widened to -$28.00/MT (29-Jul) ahead of Saudi Aramco's August Contract Price announcement on July 30 as genuine loading uncertainty built at Yanbu, Saudi Aramco's main LPG loading terminal since the conflict started, with reported loadings dropping off toward month-end. Cancellation of Saudi loading at Ras Tanura compounded sense of butane shortage in the market.

CROSS-REGIONAL DYNAMICS

• Gasoline E/W spread (Eurobob NWE swaps vs SG 92 RON swaps): opened +$85.64/MT (1-Jul), narrowed to +$36.47/MT (24-Jul), then widened back to +$72.76/MT by month-end (31-Jul). Singapore 92 RON modestly outpaced Eurobob over the month, narrowing the spread after the mid-month swing
• Clean Product Freight: Middle East freight rates for LR1 (55kt) and LR2 (75kt) both jumped roughly 40% over the month, finishing at $113.36/mt and $108.46/mt (31-Jul) respectively, retreating early-month before firming alongside the mid-month naphtha and gasoline price rally and holding firm into month-end as war-risk premiums and rerouted voyages pushed costs higher.
• Propane FE CFR vs propane Middle East CP swaps spread: full-month avg +$85.04/MT, ranging from +$35.00/MT (7-Jul) to +$140.00/MT (23-Jul) — a sharp divergence between the Far East benchmark and the Middle East source as Far East demand outpaced the CP values with some Middle East producers having to discounts cargoes to clear volumes.
• LPG Freight: divergent routes highlighted a structural shift toward US-origin cargoes rerouting away from the Middle East Gulf, as freight (BLPG1) fell 14.9% to $213.00/mt (30-Jul) amid persistent Hormuz risk and owners pulling away, while US Gulf to Japan freight (BLPG3) surged 59.3% to $269.00/mt (peaking at $295.00/mt on 24-Jul) as charterers leaned on the US route despite the higher freight cost simply to secure reliable volumes.

CURVE STRUCTURE

Gasoline SG 92 RON Swaps

Front month (+22.9%) outrunning the back (+9.0%), geopolitical risk premium concentrated in the prompt.

Naphtha Japan CFR Swaps

A structural flip from mild contango to steep backwardation over the month.

Propane FE CFR Swaps

A violent bear-to-bull reversal from June's flattening, tracking the Hormuz re-escalation almost tick for tick and pushing the curve into extreme backwardation by month-end.

FEI propane timespread (BAL M/M1): opened $19.00/MT (1-Jul), dipped to $11.00/MT (8-Jul), rallied to $28.00/MT (24-Jul), and eased to $22.00/MT (31-Jul).

PRICE VOLATILITY

• Naphtha (Japan CFR) leads the July re-acceleration — the second-highest reading in the six-month window for both, behind only March's shock peak as day-to-day swings tracked the sharp escalation and partial de-escalation of the Hormuz conflict through the month
• Propane and Butane FE CFR eased back from June's own spike, while gasoline and naphtha re-accelerated — LPG's peak volatility this cycle landed a month earlier than the other two, both of which peaked in March since LPG's own shock arrived first, when the Strait of Hormuz initially closed back in June, leaving less room for a repeat spike in July even as prices kept climbing

SOMETHING TO WATCH

• South Korea Naphtha Export Ban Expiry: South Korea's 5-month domestic naphtha export ban was officially announced by the Ministry of Trade, Industry and Energy (MOTIE) on March 26, 2026, and took effect on March 27, 2026, placing the end of the 5-month term squarely at the end of August (August 27). If the ban lapses, Korean petrochemical crackers will likely return to the international spot market to secure September-loading feedstock, altering regional liquidity. Watch for MOTIE decision on whether the restriction will be extended or allowed to expire.
• China Export Policy Reactivity: Beijing's July 8 policy reversal, abruptly lifting export restrictions just weeks after the June 9 second-batch quota release (18 million MT), demonstrates that China's export tap now functions as a reactive economic lever rather than a predictable schedule. This sudden shift creates immediate volatility and changes product flows as refiners maximize yields based on real-time margins. Watch for actual refinery run rates and physical vessel loading data to gauge real impact of latest Chinese export quotas.
• Middle East & US LPG Freight and Logistics: alongside slowing LPG loading from the Yanbu terminal since late July due to mounting security concerns over potential Houthi targeting, persistent Hormuz risks continue to reinforce rising structural shifts toward US-origin cargoes. Rising security uncertainty and logistics friction across the Middle East are causing market participants to pause and reassess regional risk before committing to new fixtures, driving charterers to lean more heavily on US supplies despite higher freight costs. Situation requires close tracking of Red Sea/Hormuz security developments, Yanbu terminal loading updates, and the ongoing trajectory of US-to-Asia freight economics.

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