Petroleum products and refinery operation draw attention

-Gasoline-
The gasoline market in Asia is expected to be affected by operational status of refineries in Southeast Asia and Africa. Indonesian state-run company Pertamina started a trial run for a 90,000b/d Residue Fluid Catalytic Cracking (RFCC) of its 360,000b/d Balikpapan refinery in December 2025. Market sources said that Pertamina would operate the RFCC at around 50% to capacity after 2026 began and would check the situation for a while. Market players are paying attention to the 300,000b/d Pengerang Refining and Petrochemical (PRefChem) in Malaysia and the 650,000b/d Dangote refinery in Nigeria, both of whose operations were unstable in 2025. In Japan, imports during summer in 2026 is likely to decrease from the previous year since few oil companies including ENEOS are scheduled to conduct turnaround. Some refiners intend not to sign term import contracts for 2026.

-Naphtha-
In Asia, the naphtha market is forecast to be firm. Market players expected that supply/demand would unlikely loosen as production capacity of naphtha nearly reached the upper limit. In South Korea, S-Oil is scheduled to start up a 1.80 mil mt/year ethylene facility of its Shaheen Project in 2026 and exports of naphtha from the Onsan refinery is predicted to decrease. While operation rates of existing naphtha crackers might continue to be curbed in Asia and Europe, an increase in imports by China is offsetting a decline in demand from other countries.

Market players are paying attention to peace talks between exporting country Russia and Ukraine, and also to the LPG market. Regarding futures prices for naphtha on a CFR Northeast Asia and for LPG, the price gap was getting wider toward the summer (naphtha higher). While the aromatics market is low, more LPG might be used to improve yield of olefin.

-Jet and Kerosene-
In 2026, less turnaround would be carried out than previous years in Japan and South Korea, and exports of mainly gasoil are forecast to be high. Meanwhile, global supply volumes are likely to be influenced by the progress of peace talks between Russia and Ukraine. In 2025, the US got involved in the peace talks, which have been carried out between the two nations. But attacks on oil facilities and tankers are continuing and the distance between Russia and Ukraine is large. It might take long time to resolve supply concerns. On the demand side, the US reached an agreement on the tariff negotiations with China and the European Union (EU). Market players are hoping for economic growth and an increase in demand for jet fuel and gasoil.

-Fuel Oil-
VLSFO is expected to be supplied mainly from outside Asia. In the Middle East, the 615,000b/d Al Zour refinery of Kuwait Petroleum Corp is gradually recovering. Meanwhile, operations of the 650,000b/d Dangote refinery in Nigeria and a 150,000b/d Residue Fluid Catalytic Cracking (RFCC) of Pengerang Refining and Petrochemical (PRefChem) in Malaysia are unstable. As a result, fuel oil distillate would likely continue to be sold going forward. In addition, Sudanese heavy sweet Dar Blend is expected to be supplied to Singapore.
For HFSO, exports from Russia are anticipated to increase if peace talks between Russia and Ukraine progress. In the Middle East, new refineries are scheduled to start up in countries including Saudi Arabia and fuels for power generation would be switched from HSFO to liquefied natural gas (LNG) in 2026.