June Pricing Analysis - Asia & Middle East Light Ends

June 2026 marked a decisive unwinding of the Hormuz risk premium across Asia and Middle East light ends as the US-Iran MoU (17-Jun) and US temporary sanctions waiver (22-Jun) triggered a broad-based selloff from early-month peaks.

Gasoline 92 RON fell 14.7% open-to-close to $100.16/bbl (30-Jun). Concurrently, the physical crack spread vs Dubai widened from $21.51/bbl to $32.87/bbl. This divergence where cracks strengthened despite falling flat prices was driven by upstream crude oil collapsing faster than refined products. The gasoline complex found a firm regional floor from strong seasonal summer demand and tight prompt supply, Beijing’s early-June flat year-over-year second-batch quota release added some supply relief, but this is counterbalanced by South Korea’s ongoing emergency export constraints.

Naphtha Japan CFR declined 17.3% open-to-close to $667.75/MT (30-Jun). The naphtha crack spread vs Dubai steadily improved, crossing into positive territory on 16-Jun and reaching +$6.74/bbl (30-Jun). Regional steam cracker run-rates recovering but capped in the high 70s% range.

Propane FE CFR was the most impacted product this month, falling 34.7% open-to-close from $854.25/MT (2-Jun) to $593.25/MT (30-Jun) as extreme backwardation unwound rapidly amid arrival of record US arbitrage volumes. A vessel attack in the Strait of Hormuz on 25-Jun briefly renewed transit uncertainty but failed to reverse the broader de-escalation.

Market Acivity

GASOLINE: Aramco Trading Singapore dominant seller across all cargo sizes; Unipec sustained Chinese state-led demand; buy-side activity reflected steady seasonal lift through June

• 92 RON 100kb: 4 trades cleared between $97.80 and $114.30/bbl within the month. Aramco Trading Singapore captured 3 of the 4 confirmed trades as the primary seller. Trafigura sold the low cargo to Vitol Asia at $97.80/bbl on 24-Jun for July delivery.
• 95 RON 50kb: 4 trades at $106.60-$121.00/bbl with Unipec as the dominant buyer (bought 3 of 4 trades) and PTT International as the main seller (2 trades).
• Buyer coverage held steady through the month, led by Unipec, Vitol Asia, BP Singapore, and SK Energy, consistent with seasonal demand and tight Chinese domestic supply. No trades cleared after 24-Jun with sellers (Vitol Asia, Gunvor, PTT) offering 92 RON at $99-100/bbl and 95 RON at $101.80/bbl in the final week. Market in price discovery mode heading into July.

NAPHTHA: Sellers return aggressively as ADNOC clears stockpiled Ruwais naphtha via Sohar STS; 8 trades cleared on window this month

• ADNOC Global Trading Asia dominated sell-side with 13 active offers and 6 of 8 confirmed trades. Window shifted decisively to offer-dominated evident by the sharp structural reversal from May's buy-dominated window. Kpler reported that ADNOC cleared roughly 1 million MT/month of stockpiled Ruwais naphtha via Sohar STS operations.
• Buy-side thinned significantly through the month, as a cessation in hostilities eased supply concerns. Glencore Singapore was the most active buyer with 11 active bids, followed by Equinor and TotalEnergies.
• A total of 12 trades of 25kt CFR Japan parcels cleared under physical window this month across delivery range H1 Aug 26 through H1 Sep 26. Trade prices fell from $788/MT (2-Jun, ADNOC to BP Singapore, H1 Aug delivery) to $643/MT (26-Jun, ADNOC to Glencore, H2 Aug) before recovering to $668/MT (30-Jun, ADNOC to Glencore, H1 Sep). Gunvor Singapore emerged as both buyer ($651/MT H1 Aug, 29-Jun) and seller ($656/MT H2 Aug to Glencore, 29-Jun) in the final week.

LPG: More physical offers return to the CFR Japan propane window as the collapsing US-Asia arbitrage dried up spot demand, forcing traders to clear prompt length in the public window; 2 spot trades cleared with BWPS acting as the sole seller.

• BWPS dominated sell-side with 11 active offers, BASF provided 4 offers at steadily declining diffs (Jun FEI +$4/MT on 5-Jun to -$6/MT by 10-Jun). SwissChemGas is the most active buyer with 5 active bids this month.
• A total of 2 trades cleared, both cargoes are sold by BWPS at Jul FEI +$27/MT to SKGI (12-Jun, 1H Jul delivery, 23kt CFR Japan) and at Jul FEI +$24/MT to Oriental Energy (16-Jun, 2H Jul delivery, 23kt CFR Japan).
• Bid diffs dropped sharply amid cessation of hostilities in the Middle East: post-MoU (17-Jun) bids shifted to Jul FEI +$17/MT and dropped further to Jul FEI +$1.68/MT around late June (22-25 Jun). As discussion moved to August delivery period, bids recovered from Aug FEI +$5 to +$11/MT to Aug FEI +$18-19/MT on 30-Jun. A new participant spotted, Hartree Partners, on 26-Jun physical window.

Price Action

• Prices retreated sharply from early-June peaks as the Hormuz MoU and US waiver of Iran sanctions deflated risk premium; all products hit monthly lows on 25/26-Jun following a fall in crude prices, though flat prices remain elevated versus levels a year-ago.
• Both 92 RON and 95 RON softened throughout the month. Gasoline cracks firmed as crude prices lowered more than that of refined products.
  
  • Gasoline 92 RON: -12.4% open-to-close; MTD avg $107.62/bbl (-16.8% MoM, +34.5% YoY)
  • Gasoline 95 RON: -12.4% open-to-close; MTD avg $109.86/bbl (-16.5% MoM, +33.9% YoY)

• Naphtha Japan CFR: -14.2% open-to-close; MTD avg $704.60/MT (-25.1% MoM, +19.1% YoY); firmed briefly to peak on 3-Jun on Jizan outage tightness before a ceasefire-driven selloff dragged cracks into negative territory through W1-W2; cracks finally turned positive on 16-Jun as crude outpaced naphtha on the downside, firming to +$7.61/bbl on 26-Jun.

• Propane FE CFR: -30.6% open-to-close; MTD avg $679.58/MT (-24.4% MoM, +21.9% YoY); driven by a heavy surge in US volume arrivals into Asia occurring alongside weak downstream demand, as end-users restricted spot intake to the absolute minimum required to sustain baseline steam cracker and PDH operations.
• Propane ME CP: MTD avg $646.33/MT (-26.2% MoM, +16.6% YoY)-38.6% open-to-close, the steepest decline among light ends products; MTD avg $646.33/MT (-26.2% MoM, +16.6% YoY); peaked on 2-Jun and fell every session through 26-Jun, a more one-directional decline than the FE benchmark, consistent with the market pricing in Hormuz de-escalation directly at the source.
• Saudi Aramco July LPG CP: Set at $580/MT for propane (-$180/MT MoM) and $600/MT for butane (-$220/MT MoM), supported by steep supply-driven repricing evident across spot and swap markets through June. India, the main buyer for Middle Eastern LPG, had been slow to lift cargoes even after the news of Hormuz opening. This price drop may encourage buyers to pivot back.

Cross-Market Dynamics

• Gasoline top of the barrel; naphtha crack crosses positive as crude collapses; propane discount to Naphtha widens to -$90/MT on swaps basis; C3/C4 at tightest since war began.
• Gasoline 92 RON crack vs Dubai: avg +$28.22/bbl (Jun MTD) vs +$26.05/bbl (May); opened $21.51/bbl (2-Jun), closed $31.87/bbl (30-Jun), gasoline cracks tightened to month highs as the complex insulated itself from crude-led softening, the Geelong refinery alkylation unit outage (offline since a mid-April fire, not expected to recover before 2027) and Port Arthur's full shutdown (effective 15-Jun) structurally tightened supply. However, the scheduled restart by 28-Jun, China’s 9-Jun second-batch export quota release (18 million MT), together with the Iran sanctions waiver (22-Jun) raising expectations of returning Middle East supply, capped further upside.
• Naphtha Japan CFR crack vs Dubai: avg -$0.23/bbl (Jun MTD) vs +$2.34/bbl (May); troughed -$8.27/bbl (4-Jun), remained negative through W1-W2 (2-12 Jun) before crossing positive on 16-Jun, closing +$6.74/bbl (30-Jun). Persistent negative cracker margins suppressed restart economics through W1-W2 despite falling feedstock costs. Although arbitrage volumes eased prompt naphtha supply crisis, cracking margins remain structurally trapped by downstream petrochemical oversupply and weak regional end user demand.
• Propane FE CFR swaps vs Naphtha Japan CFR swaps: -$27.75/MT (2-Jun) to -$76.25/MT (30-Jun). The deepening discount drove some demand from flexible Chinese crackers to use cheaper LPG feedstock. Rangebound near parity at -$27.75/MT (2-Jun) before widening to a deep feedstock discount of -$89.00/MT (26-Jun) as propane collapsed far harder than naphtha. The widening spread incentivised feedstock switching among flexible Asian crackers. Chinese PDH operating rates recovered to high 60s% from April's mid-50s% as LPG feedstock cost dropped, improving propane-to-propylene margins.
• Middle East CP Propane/Butane swaps spread (C3/C4): Tightened sharply from -$45/MT (2-Jun) to -$7/MT (26-Jun), as butane values softened on hope that more of the product would flow out of the Middle East. Butane pullback outpaced propane through the back half of June, resulting in the tightest C3/C4 spread since the Hormuz crisis began.
• 95/92 RON swaps - Octane spread: averaged +$1.91/bbl (Jun MTD), compressing -$0.77/bbl versus May's +$2.68/bbl; opened +$2.07/bbl (2-Jun) and settled into a tight $1.83-$1.93/bbl range from mid-June onward, bottoming at +$1.83/bbl (19-25 Jun) before a small uptick to +$1.90/bbl (26-Jun); the steady narrowing reflects a shrinking octane premium as the broader gasoline complex sold off.

Cross-Regional Dynamics

• BLPG1 vs BLPG3 freight structure inverts post-MoU to record +$53/MT; record Indian LPG imports diversify away from Middle East Gulf; Eurobob premium holds; naphtha E/W arb briefly inverts.
• BLPG1 vs BLPG3 structural inversion: BLPG3 (Baltic LPG 3 USG to Japan) was at $78.62/MT above BLPG1 (Baltic LPG 1 Middle East to Japan) on 1-Jun. However, the freight pattern turned against a pre-war norm where the longer US Gulf voyage typically commands the premium after the US-Iran MoU. BLPG1 was at $11.05/MT higher than BLPG3 on 17-Jun and the spread closed at +$83.58/MT (30-Jun). BLPG1 held firmer as Middle East flows increased but with limited vessel owners willing to take on the regional war risk. USGC is also experiencing oversupply of vessels since most vessels were heading to the West since the start of the conflict.
• Propane FE CFR vs Middle East CP swaps spread (FE/CP Propane): opened +$57.50/MT (2-Jun), held positive through 22-Jun before crossing negative on 23-Jun, closed -$6.00/MT (29-Jun). The FE M1 spread's late-month reversal reflects India, the region's largest LPG buyer, staying committed to costlier US rather than rushing back to Middle East supply despite news of the Hormuz situation improvement.
• E/W gasoline spread (Eurobob NWE swaps in USD/bbl vs SG 92 RON swaps): avg +$0.04/bbl (Jun MTD) vs -$1.28/bbl (May), widening +$1.33/bbl MoM; no structural Eurobob premium is evident, the two markets traded essentially at parity throughout, with a small SG92 premium in May narrowing to roughly flat by June. The spread was choppy within a tight band: it ranged from a SG92 premium of -$6.05/bbl (9-Jun) to a Eurobob premium of +$7.21/bbl (25-Jun), the widest print of the period, before easing to +$6.09/bbl by month-end (30-Jun).
• Naphtha Japan CFR premium over Naphtha NWE CIF compressed -$34.01/MT MoM to avg +$28.86/MT (Jun MTD) from +$62.87/MT (May); tightest at +$9.75/MT (19-Jun) before briefly inverting to -$17.25/MT on 25-Jun. NWE naphtha briefly traded above Japan CFR before reverting to +$15.25/MT (26-Jun).

Curve Structure

• Propane FE CFR swaps: violent bear-flattening unwound extreme backwardation. M1-M6 compressed from +$111.98/MT to +$3.32/MT, the curve flattening to near-zero from its earlier extreme structure; paper swaps fell less severely than the physical spot window (-$294.75/MT open-to-close), with the forward curve insulated by expectations of gradual supply normalisation rather than the acute prompt dislocation driving physical prices.

• Naphtha Japan CFR swaps: M1 fell -$128.25/MT while M12 fell only -$68.60/MT; curve remains in solid backwardation but significantly flatter.

• FEI propane timespread (BAL M/M1): opened $90.00/MT (2-Jun), stabilised in the $13-16/MT range from 17-Jun, closing at $16.00/MT (29-Jun) following the US-Iran MoU signing; the flattening backwardation signals weaker prompt sentiment as the market prices out near-term scarcity.
• CP Propane Swap Timespread (M1/M2): Averaged +$55.76/MT for June MTD, widening from the May average of +$44.95/MT. The spread opened heavily backwardated at +$59.00/MT (2-Jun) before easing down to +$20.00/MT (16-Jun) as anticipation surrounding the US-Iran ceasefire framework bled out the prompt geopolitical premium. However, the curve resharpened to +$79.00/MT (25-Jun) after an unattributed projectile strike on a container vessel off Dahit, Oman, reintroduced immediate transit risk.

Price Volatility

• LPG Coefficient of Variation (CV) surges past March shock peaks as the Iran-US MoU introduced a new surge of volatility; naphtha and gasoline volatility elevated but still below their March highs.
• Propane and butane CV now exceed their March 2026 shock peaks, the unwinding of the Hormuz risk premium is proving as volatile as its construction.
• Propane FE CFR leads at 15.67% CV; butane at 17.24%, both above March's 11.57% and 11.91% peaks; gasoline 92 RON rose to 7.29% as the 25/26-Jun selloff extended the intra-month range, though still well below March's 13.84%.
• Naphtha MEG LR1 at 9.33% and Japan CFR at 7.82%, both above May levels but still tracking below March's peak of 16.37-18.49%, naphtha's price action, while sharp, has not matched the speed of the initial shock.

Something to Watch

• Middle East LPG Supply Recovery and Freight Upside Risk: Monitor freight, increasing STS fixture activity off Sohar and Fujairah could inflate BLPG1 freight further on residual port backlogs and war-risk premiums.
• Naphtha Crack Sustainability: The crack firmed to +$6.74/bbl (30-Jun) but regional cracker runs remain capped in the high-70s%, one more crude leg lower could trap cracks negative again given them petrochemical margins. Monitor LPG feedstock switching and downstream PE/PP margins.
• Regional Gasoline Supply: China's 9-Jun release of its second-batch refined product export quotas, 18 million MT across clean products, essentially flat versus the year-ago batch, adds a bearish supply overhang for the Singapore complex. This was structurally counterbalanced by South Korea's ongoing emergency export constraints (active since March 13), which cap domestic clean product exports at 2025 baseline levels. Focus shifts to monitoring actual volumes as the allocation clears into regional spot markets through July.
• Panama Canal Draft Advisories: The maximum authorized draft reduces to 49.5ft effective 1-Jul. While this has zero near-term operational impact on laden VLGCs (~12m draft), it signals ongoing water-management caution ahead of potential El Niño development in 2nd half of this year.

Note: All figures, prices and market activity referenced in this report are based on the period 2-30 June 2026.