Cracks continue their relentless rise, a trend that began in early August, supported by a brent that remains stuck in the $65–68/bbl range. The recent strength in naphtha has dragged down the gas-nap spread, which has fallen significantly over the past weeks, said Jorge Molinero, the commodity owner at Sparta, an all-in-one pricing, forecasting and live intelligence platform.

 

Outlook for October deliveries into Asian outlets continues to improve, he stated. 

 

The gradual rise in Asian cash differentials and the E/W has strengthened sentiment. The structural imbalance created by refinery turnaround season in Asia post-summer has pushed regional players to open the arbitrage.

 

According to Sparta's arbitrage panel, margins for HFRN cargoes out of the MED have improved by $10/mt, with the arb opening this week for 2H October arrivals from Skikda via the Cape of Good Hope.

 

This interest has translated into sharp gains in FOB MED premiums, making the Asian route the most attractive option for regional sellers, with margins well above those achievable in NWE during the same period, stated Molinero.

 

So far, we have not seen much reaction in the NWE physical market. However, if additional cargoes are confirmed on the MED–JKT route, European premiums will need to rise in order to remain competitive for this product, said the industry expert.

 

Turning to the gasoline market, the Sparta expert said September gas-nap spread had narrowed by $15/mt since the end of last week, with EBOB impacted by the restart of Dangote’s RFCC last Friday.

 

On the other leg, Molinero said the continued strength in naphtha has also contributed to downward pressure on the spread.

 

Despite the recent correction, further downside in gas-nap appears limited by an already strong positive E10 blending margin in Europe, as well as gasoline arbitrage flows from ARA into the Atlantic basin, where delivered prices are well below those in the USGC for September and October deliveries, he added.

 

A new bullish factor also points to near-term support for the naphtha market. Russia-Ukraine hostilities have intensified in recent days, impacting Novatek’s refinery at Ust-Luga. Although the ultimate extent of the disruption remains uncertain, operations were fully halted from last Sunday.

 

In 2025, Novatek exported an average of about 420,000 tonnes of naphtha per month from Ust-Luga to Asian countries - including Singapore, Malaysia, Taiwan and China - according to LSEG data.

 

Any potential reduction in this flow in the short term, at a time when the market is firm and arbitrage is opening for October arrivals, could further contribute to higher Asian cash differentials and stronger paper in the near term.

 

In summary, despite recent volatility in timespreads and pressure on the gas-nap spread, the naphtha market remains underpinned by strong fundamentals as we move past the summer, said Molinero.

 

The combination of robust cracks, improving Asian demand supported by refinery turnarounds, widening arbitrage opportunities, and potential disruptions to Russian supply all point to sustained strength in both cash differentials and paper going into the autumn months, he added.