Russia may cut naphtha exports by third after fires-traders, data

MOSCOW, Jan 26 (Reuters) - Russia will likely cut exports of naphtha by some 127,500 - 136,000 barrels per day, or around a third of its total exports, after fires disrupted operations at refineries on the Baltic and Black Seas, according to traders and LSEG ship-tracking data.

Asia's naphtha markets surged about 19% this week against the backdrop of supply disruption fears from Russia.

There are jitters in the market because Russia is a key exporter of naphtha to Asia, and this kind of short-term disruption could cause prompt tightness, a naphtha trader said.

Russian energy company Novatek was forced to suspend some operations at the huge Baltic Sea fuel export terminal and "technological processes" on Sunday at a nearby fuel-producing complex due to a fire, started by what Ukrainian media said was a drone attack.

Four days later, Rosneft's Tuapse oil refinery in southern Russia halted oil processing and output following a fire on Thursday, two industry sources familiar with the matter told Reuters.

Both plants are export-oriented and ship fuel via sea terminals mainly to China, Taiwan, Singapore and Malaysia.

According to the LSEG data, Russia exports of naphtha, used mainly as feedstock in petrochemical industry, amounted to around 17.1 million metric tons in 2023, or 400,000 barrels per day.

Of that, Ust-Luga Novatek's terminal accounts for just less than a quarter, or 95,000 bpd, Tuapse's refinery - 40,000 bpd.

This month, Novatek has already been able to ship some 300,000 tons of naphtha from its Ust-luga terminal this month before the fire broke out.

Some 150,000 tons of the fuel has also been exported from Tuapse in January.

Analysts have said Novatek's Ust-Luga producing complex may resume large-scale operations in weeks, while Kommersant newspaper, citing sources, has said it would require two months.

Industry sources said Tuapse refinery may stay idle until early March. (Reporting by Reuters; writing by Vladimir Soldatkin Editing by Tomasz Janowski)