Peace headlines hit paper, but naphtha physicals remain in crisis mode

Commentary summary:

• The latest paper sell-off is driven by diplomatic headlines rather than any meaningful improvement in physical supply. Paper prices have corrected but naphtha physicals continue to reflect an unresolved structural shortage.

• Physical premiums in Asia continue to climb, with Korea above $150/mt over MOPJ and India above $200/mt FOB MOPAG.

• Product availability remains the key constraint, with no credible near-term rebalancing mechanism in sight. South Korea’s export ban and the risk of further domestic protection measures are adding to the tightening supply picture.

• Russian arbitrage flows remain too limited to offset the loss of regional availability, even under the current waivers.

The latest sell-off in paper appears to be another example of diplomatic headlines moving flat price without changing the underlying supply picture.

After Trump showed new signs of de-escalation on Tuesday, the five-point peace plan jointly proposed by China and Pakistan on March 31, calling for an immediate ceasefire and safe passage through Hormuz, has pushed Brent below $100/bbl and weighed on naphtha paper.

This pattern has already repeated several times since the conflict began, with de-escalation rhetoric softening paper while leaving physical conditions largely untouched.

For deeper market intelligence, daily commentaries, and expert insight, access Sparta Knowledge with a free 30-day trial: https://signup.sparta.app/