Europe’s Naphtha market has now recorded four consecutive weeks of gains, with FOB Netherlands prices rising 12.12% in the latest week after a sharp decline in mid-June.
The rally coincides with renewed disruption in the Red Sea, where a fresh Houthi blockade of Saudi-linked shipping through Bab el-Mandeb has heightened concerns over supply and freight availability.
The timing lines up almost exactly with a fresh Houthi blockade on Saudi linked shipping through Bab el-Mandeb, announced in July after the latest Iran war ceasefire broke down.
Roughly 388,000 metric tonnes of naphtha cargo have transited the strait each month over the past two months, nearly double the 2025 average.
Source: Price Watchâ„¢ Naphtha Prices
Three Routes Under Strain
That corridor now carries fresh risk after Houthi forces struck two Saudi tankers on July 23. Vessels diverting around the Cape of Good Hope instead face up to 19 days of extra transit time, tightening the tonnage available for Europe on any given week.
Meanwhile European steam crackers, including LyondellBasell at Rotterdam, SABIC at Geleen, and INEOS at Grangemouth, keep drawing on naphtha for roughly 70% of regional naphtha consumption, so even a modest supply pinch shows up fast in pricing.
What Traders Are Actually Watching
The east-west naphtha swap spread widened sharply this week, both on the day and over the week, as traders price in Suez disruption risk before physical cargo flows have shifted at all, moving from roughly $XXX/MT to $XXX/MT in a matter of days. That gap between paper and physical is often the first place stress becomes visible.
The Angle Most Coverage Misses
Russian naphtha exports have been declining at the same time Chinese buying interest is improving, a pairing that gets far less attention than the Red Sea headlines but may matter just as much.
Less Russian tonnage reaching global markets, combined with firmer Northeast Asian demand from buyers in China, Japan, and South Korea, is quietly pulling cargoes away from Europe before they ever reach a European port.
Naphtha Market Outlook
Two questions are worth sitting with. If the blockade holds through August, does Europe’s naphtha market shift from a temporary squeeze into a structurally tighter one.
And if Chinese buying keeps strengthening while Russian supply keeps shrinking, does that combination end up mattering more than the shipping story everyone is watching. For the full weekly benchmark data, Price Watch™ keeps a live tracker.
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