Why are fuel and petrochemical prices outpacing crude – and how long will it last?

Global refined-product exports were down 25 per cent year on year in August, with losses concentrated in Russia and the Persian Gulf, analysts say This summer, David Chen, a Chinese national living in Japan, got an unexpected lesson in global industrial supply chains – delivered through a bag of potato chips. When popular Japanese snack brand Calbee replaced its signature colourful packaging with monochrome designs, Chen initially assumed it was a marketing gimmick. “Then news reports explained the switch stemmed from a naphtha supply crunch. I even looked up the word,” Chen said. Naphtha, a flammable liquid processed from crude oil, might not be a household name, yet it serves as a foundational input in polyester fibres, packaging and industrial solvents. The squeeze has prompted Japanese media to coin a new term: “naphtha bankruptcies”, reflecting mounting anxiety among some companies over securing vital oil-derived inputs. A June survey by corporate research firm Tokyo Shoko Research underscored the widespread impact, finding that about 80 per cent of more than 7,000 responding firms had difficulty procuring oil-derived products. However, behind Japan’s localised squeeze lies a wider strain on global supply.

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