Qatar holds close to 20% of the global LNG market, with about 80% of its exports bound for Asia. The impact on Qatar’s LNG production, coupled with anticipated tight supplies of naphtha from the Middle East, has forced a number of cracking units in Southeast Asia, South Korea and India to either declare force majeure or curtail run rates.
Qatar holds close to 20% of the global LNG market, with about 80% of its exports bound for Asia. The impact on Qatar’s LNG production, coupled with anticipated tight supplies of naphtha from the Middle East, has forced a number of cracking units in Southeast Asia, South Korea and India to either declare force majeure or curtail run rates. Once an eastern gateway for waves of innovation in the energy industry, the closure of the Strait of Hormuz for a prolonged period has stop a good part of crude oil and naphtha being sent from Middle East to Asia. In response to uncertainty in feedstock supply, petrochemical producers are cutting production capacity across Northeast and Southeast Asia.
Key Takeaways:
• Feedstock disruptions: Strait of Hormuz instability is affecting naphtha, LPG, and crude supply chains across Asia.
• Run-rate cuts spreading: South Korea and China producers are reducing utilization 10–30%, signaling supply-side tightening.
• Force majeure wave: Multiple crackers in Singapore, Indonesia, and South Korea have declared force majeure.
• Trade flow shifts: China suspending oil product exports and MRPL (India) export uncertainty may tighten regional fuel availability.
• Olefin & aromatics supply risk: Reduced cracker operations could affect ethylene, propylene, benzene, and styrene markets across APAC.
Regional Petrochemical Plant Run Rate Cuts and Force Majeure:
|
Region |
Company |
Facility/Capacity |
Issue |
Operational impact |
Insight |
|
South Korea |
Lotte Chemical, KPIC, LG Chem |
Multiple petrochemical crackers |
Feedstock supply disruption linked to Middle East tensions |
Run rates reduced |
Olefin supply is tight as producers reduce operating rates to manage feedstock availability and naphtha cost increases. |
|
South Korea |
YNCC (Yeochun NCC) |
Plant 1 & 2 |
Naphtha feedstock supply disruption from Middle East |
Force majeure; operating at minimum capacity |
Lower cracker runs could tighten supplies of aromatics and olefins in northeast Asia markets. |
|
Indonesia |
Chandra Asri |
Ethylene 900,000 tpa; Propylene 490,000 tpa steam cracker |
Maritime transport disruption due to Strait of Hormuz instability |
Force majeure declared |
Delayed feedstock imports from the Middle East are currently affecting olefin production in Southeast Asia as well as downstream supply chains. |
|
Singapore |
Aster Chemicals |
Pulau Bukom and Jurong are
1.1MTPA ethylene cracker |
High naphtha/LPG prices and supply instability |
operating at minimum capacity |
Increasing feedstock prices and supply uncertainty are pushing cracker restarts back and constraining availability of olefins in the region. |
|
Singapore |
PCS Pte. Ltd. |
Petrochemical production complex -
Ethylene capacity 1.1MTPA |
Middle East conflict disrupting maritime transport and logistics |
Force majeure issued to customers |
Disruptions to the supply chain may affect the flow of polymers and chemicals in Southeast Asia. |
|
Singapore |
Dairen Chemical (Taiwan-based) |
Vinyl acetate monomer (VAM) |
Feedstock supply disruption |
Force majeure declared |
Disruptions to output could affect downstream products including styrenics and solvents in the region. |
|
India |
Mangalore Refinery and Petrochemicals Ltd (MRPL) |
500,000 bpd refinery (40% export oriented) |
Export shipment uncertainty due to Middle East conflict |
Force majeure declared on gasoline export cargoes
|
Export disruptions could tighten regional fuel supply and shift trade flows in Asia. |
|
China |
SECCO, CSPC, CNOOC, Sinopec Hainan, Sinopec Zhongke, Fujian Refining & Chemical, ExxonMobil Huizhou |
Multiple petrochemical facilities |
Feedstock supply concerns and policy response to Middle East tensions |
Run rates cut by 10–30% |
Lower running rates could tighten the supply of petrochemical derivatives and add a layer of volatility to domestic prices. |
|
China (Policy) |
Chinese Government |
National oil product exports |
Geopolitical conflict impact |
Export suspension requested from March 4 |
Export restrictions may tighten global fuel supply while prioritizing domestic energy security. |
|
China |
Zhejiang Petrochemical Corp |
Crude Production Unit |
Geopolitical conflict impact |
Run rate reduced by 20% |
Iran war tightening crude supply. |
|
Vietnam |
Hyosung Vina Chemicals |
Polypropylene and LPG |
Due to feedstock supply issues |
Force majeure declared |
Feedstock shortages may reduce production and tighten Southeast Asian chemical supply. |
Regional tensions in the Middle East and a longer disruption of shipments via the Strait of Hormuz will keep feedstock uncertainty high across Asia. With crude oil, LNG and naphtha supplies tightening, petrochemical producers in Northeast and Southeast Asia may also continue to cut run rates or call force majeure, further tightening olefins and aromatics supply and supporting volatility in prices across regional markets.
