The prevailing conflict between Russia and Ukraine induced wild gyration in the quotations of feedstock Naphtha which were triggered by the swings in the International Crude Oil market. Whereas, according to several market sources the suppliers and traders were reluctant amidst the uncertainties prevailing in the international market. In the last week, Crude Oil gained on the uncertainty of the peace talks between Russia and Ukraine, and the void created due to the absence of Russian Crude further strengthened the volatility on a global level.

Therefore, due to consistent fluctuations in the Crude Oil prices, the Naphtha quotations maintained a consistent upwards rally and crossed the USD 1000 per tonne mark in the Northeast Asian region peaking to the 9 years high, fundamentally the Naphtha market in Asia was supported by the supply from the Middle East besides limited arbitrage from the West. Although, the current developments in the market hindered the demand outlook of Ethylene and Ethylene Oxide as the producers were reluctant amidst the narrowed spread and uncertain margins between the Naphtha and Ethylene as the refining margin for Naphtha shrunk to the lowest in a year. Whereas, even though the international buyers were hesitant to procure the Russian Ural, Indian refiners were actively traded with the Russian suppliers in anticipation of better netbacks amidst the swinging prices of Crude Oil. Whereas, the European market was the major impacted region amidst the sanctions imposed on Russia which impacted the overall arbitrage between European Union and Russia.

As per ChemAnalyst, the soaring prices and curtailment in the production margin of upstream Naphtha levied its impact on the quotation of Ethylene Oxide globally. Whereas, the staggering market dynamics in the European region were majorly contributed to the inflated offers for Ethylene Oxide in Europe. In response, the prices of Ethylene Oxide observed a substantial gain in the past couple of weeks and according to the market experts, the current dynamics were severely volatile, whereas the participants were closely monitoring the peace talks amongst the Russian and Ukrainian convoy with an expectation in the improvement of the global supply chain.