Key facts
- European naphtha imports increased to 1.74 million tons in July.
- Algeria, Italy, Spain, and the US were key suppliers of naphtha to Europe.
- US naphtha shipments reached their highest level since August 2025.
- Strong gasoline blending economics boosted naphtha demand.
- Low Rhine water levels hampered inland naphtha distribution.
- European gasoline export demand, particularly to Brazil, was robust.
European naphtha imports saw a significant rise in July, totaling 1.74 million tons, an increase from 1.25 million tons in June. This surge was fueled by higher arrivals from Mediterranean and North African suppliers, with Algeria being the largest contributor. Shipments from the United States also reached their highest point since August 2025.
Algerian exports may have been rerouted due to security risks and longer voyage times through the Bab el-Mandeb strait, leading to more supply staying within Europe. US arrivals benefited from stronger export activity on the US Gulf coast in June, though this support is expected to be temporary as arbitrage opportunities into Europe closed by late July.
Strong gasoline blending economics provided a key demand driver for naphtha. The European gasoline-naphtha spread widened considerably, making naphtha an attractive blendstock for gasoline production. This was further supported by robust European gasoline export demand, particularly to Brazil, which is seeking alternative supplies following Russia's extended gasoline export ban.
Despite the rise in imports, European petrochemical demand remained weak. Low water levels on the Rhine River disrupted inland barge movements, restricting naphtha supply to domestic consumers. Consequently, several steam crackers reduced their operating rates due to these logistical challenges, with some approaching minimum feasible run rates.