Russia's naphtha exports to Asia are set to fall in January, with volumes in storage swelling as US sanctions pressure key buyers including Taiwan, India and Venezuela, forcing Moscow to seek new markets, traders and analysts said.
Buyers have become more cautious after Washington imposed sanctions on top Russian oil producers, forcing sellers to hold naphtha on ships or in storage abroad from where it can be re-exported, often with the destination obscured.
"Everybody is going to be extra cautious this year when it comes to buying sanctioned cargoes," said Armaan Ashraf, director of natural gas liquids and Asia oils at FGENexant.
This means premiums on "legitimate" barrels of heavy full-range naphtha will rise or discounts on Russian cargoes will widen, he added.
Russia exports heavy full-range naphtha which is processed at reformers into aromatics for gasoline blending or to make petrochemicals.
Russia typically exports 1.4 million to 1.5 million tonnes of naphtha per month, but the volume is falling as the Tuapse refinery and Taman port are shut for repairs after repeated Ukrainian drone attacks.
The Tuapse refinery, which exports around 150,000 to 200,000 tonnes of naphtha per month, halted processing on December 31 and will take another month to restore production to normal, market sources said.
Russia's naphtha exports to Asia could fall to about 600,000 tonnes in January, preliminary data from a shipping source showed, down from about 800,000 tonnes in December.
In January and February, Asia's naphtha imports from Russia could drop to 700,000 to 800,000 tonnes, according to preliminary estimates from three Singapore-based traders, about 30 per cent lower than the one million to 1.2 million tonnes monthly average in the first 10 months of 2025.
Taiwan and India, two key Russian naphtha buyers, slashed imports in December after producers Rosneft and Lukoil were hit by US sanctions.
Tankers carrying around 350,000 tonnes of naphtha loaded from Russian ports in December show Singapore as the destination as of January 22, while others with more than 320,000 tonnes did not declare final destinations, data from the shipping source showed.
Some cargoes that loaded in December remain unsold on water, traders added.
"Russian barrels will be clearing in re-exporting sites like Karimun in Indonesia, some of it could land in the Singapore straits, or even north or west African commercial tanks," FGENexant's Ashraf said.
Around 50,000 tonnes of naphtha per month is being re-exported from the Karimun storage terminal, while some Ust-Luga cargoes are being re-shipped from Brazil, according to FGENexant.
Venezuela has also stopped importing Russian naphtha as a diluent for its crude, with some tankers making U-turns after US President Donald Trump imposed a blockade of all sanctioned tankers bound for Venezuela in mid-December.
Russia supplied an average 100,000 tonnes per month of naphtha to Venezuela between June and December last year, traders said.
To plug the supply gap, the US will reinstate its naphtha flows to the Latin American country.
"US naphtha did show some strength as flows to Venezuela resumed...but US supply alone is not going to be enough for Venezuela," said NextBarrel analyst Matias Togni.
(Reporting by Mohi Narayan in New Delhi, Natalia Chumakova in Moscow. Additional reporting by Shariq Khan in New York and Marianna Parraga in Houston. Editing by Florence Tan and Mark Potter)
