Hundreds of thousands of barrels of Russian naphtha, a crucial raw material for plastics and synthetic fibers, have been stranded at sea for over a week as South Korea, a major buyer, shuns cargoes from the nation following its invasion of Ukraine. (Image courtesy of Korea Bizwire)
SEOUL, May 8 (Korea Bizwire) – Hundreds of thousands of barrels of Russian naphtha, a crucial raw material for plastics and synthetic fibers, have been stranded at sea for over a week as South Korea, a major buyer, shuns cargoes from the nation following its invasion of Ukraine, according to Bloomberg.
The standoff is a consequence of Western sanctions against Russia over the war. South Korean petrochemical companies are now wary of importing raw materials originating from Russia, data from the commodity analytics firm Kpler shows.
More than two million barrels of Russian naphtha have been loaded onto tankers, with some of the vessels lingering near Omani waters, according to Kpler. This floating volume is over 2.5 times larger than the weekly average of around 790,000 barrels exported in January and February.
Traditionally a leading importer of Russian oil products, South Korean petrochemical firms are avoiding direct purchases from Russia or cargoes of unclear origin due to scrutiny concerns, Bloomberg reported, citing traders familiar with the situation.
In March, Bloomberg revealed that South Korean customs authorities were investigating potential rerouting of Russian naphtha into the country’s petrochemical industry. Prior to the Ukraine war, Russia was South Korea’s top supplier of naphtha.
However, since the invasion, South Korean companies have ramped up naphtha imports from nations like the United Arab Emirates and Malaysia, significantly reducing Russia’s share of the market.
While not a member of the Group of Seven (G7) leading economies, South Korea has backed the price cap imposed by the bloc, which prevents the purchase of Russian crude oil and petroleum products above a certain price threshold.
Ashley Song (ashley@koreabizwire.com)
