60% of Asia's naphtha imports come from the Middle East. That supply chain has now been disrupted for almost 2 months with some production plants offline for the next 2+ years. Think of Asia as the world's industrial area. But what's naphtha? Naphtha is a broad term used in the petroleum industry for a light, volatile liquid hydrocarbon mixture derived mainly from crude oil refining or natural gas processing. It’s not a single chemical—it’s a range of hydrocarbons (typically C5–C12 molecules) that sit between gasoline and heavier fuels in the refining chain. What's naphtha used for? 1. Fuel blending- A major component in making petrol (gasoline). 2. Most critical*- Petrochemical feedstock: Cracked in steam crackers to produce: Ethylene and Propylene. These are the building blocks for plastics, fertilizers, and other petrochemicals. 3. Industrial solvent- Used in cleaning fluids, paints, and chemical extraction. With the Strait of Hormuz closed, Bab Al-Mandab Strait disrupted, and several oil production facilities offline, supply chains in Asia are headed for a huge disruption. Naphtha is up over 78% this year alone 🥶. This might lead to global stagflation.