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Refining margins for naphtha in Asia jumped to their highest level in nearly two years on Monday, following an attack in the Gulf of Aden on a tanker transporting Russian fuel.
The profit for making naphtha, a key feedstock for the petrochemicals industry, jumped in Asia on Monday to a premium of $0.25 over Dubai crude, according to data compiled by Bloomberg.
Asian traders were spooked by the attack on the vessel carrying fuel from Russia, after the Iran-aligned Houthis had said earlier this month that Russian shipments were not targets of their attacks in the Gulf of Aden and the Red Sea.
But the attack on the oil products tanker Marlin Luanda late on Friday showed that even West-operated vessels that have been targeted can sometimes carry Russian fuels.
The Marlin Luanda tanker, operated on behalf of commodity trading giant Trafigura, was transporting Russian naphtha bought below the price cap in line with the G7 sanctions, a spokesperson for Trafigura told Reuters on Friday after the attack.
The petroleum products tanker was struck by a missile in the Gulf of Aden after transiting the Red Sea, Trafigura said late on Friday, adding that firefighting equipment on board was being deployed to suppress and control the fire caused in one cargo tank on the starboard side. No injuries or casualties have been reported, and as of Saturday, the vessel was sailing towards a safe harbor, Trafigura said in its latest update.
The Houthis targeted the Marlin Luanda because it was a UK-linked tanker, a Houthi spokesman has said, noting that the attack was in response to “American-British aggression against our country.”
The Red Sea/Suez Canal route is the shortest route for tankers from Russia’s western ports to Asia.
Since the Houthi attacks near the Red Sea intensified earlier this month, many oil tanker and container ship operators have opted to send the vessels via the longer Cape of Good Hope route around Africa.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com