中东紧张局势冲击亚太炼化业：短期承压

Supply risks from Middle East tensions:N-Tpressure to bothrefineriesandpetchemnamesIndustryOverview Cautious on petchem; enters conservation mode amid naphtha shortageGiven c.80% of Asia’s seaborne naphtha import in’25 was covered by the ME supply, we see feedstock availability for Asia crackers is under strain as thedisruptions in the Strait of Hormuz persist longer thaninitially expected (see our report).While the gov’t has initiated naphtha export curbs for five months beginning27 Mar to stabilize domestic supply chains, we see the export volumes of Korea stood at 3.89mn MT in’25,accounting for c.19% of naphtha import volumes from the ME. Of note, naphtha imports of Korea stood at26.7mn MT in’25, c.45% of the total consumption, with c.77% of naphtha import volumes coming from ME.We believe Korean chemical companies have secured naphtha inventory to sustain production through Apr. Against this backdrop, LG Chem shut its Yeosu No. 2 cracker (800ktpa ethylene, 400ktpa propylene) on 23March, and capped its Yeosu phenol/acetone plant at 80% capacity in March, with plans to further cut to 60%in April (ICISnews). Also, Lotte Chem has brought forward the planned turnaround of its Yeosu plant by threeweeks, shutting it from 27 March to 29 May, and has cut YNCC No. 1/No. 2 crackers’run-rates to 60% from65% on 16 March. We estimate the plants in Korea have been running at 66% in March, -14ppt MoM from80% in Feb. We remain cautious on petchem names’earnings, especially starting 2Q26, on (1) weaker marginsfor core products due to rising raw material costs (QTD PE/PP margins -36%/-13% QoQ, naphtha price +26%QoQ); and (2) lower utilization rate given naphtha supply disruptions. We maintain Neutral on Lotte Chem. N-T pressure for refineries: crude supply uncertainty, domestic price capWe continue to prefer refineries to chemical names, given (1) limited capacity growth in the global refining system (0.63mn/0.84mn bpd in’26/27 likely falling short of demand growth of 1mn/1mn bpd); and (2) the solidAsia GRM (QTD US$29/bbl vs. US$9/bbl in 4Q25). However, the ongoing tensions inME, which have lastedlonger than expected, have intensified uncertainty regarding crude supplies for refineries. With the ME crudeaccounts for 70% of Korea’s crude imports, we estimate refiners in Korea to have secured crude for productionthrough April, with the gov’t reserve release likely to add one more month. In addition, we estimate domesticprice cap on fuel (effective 13 March) to add volatility, although the gov’t pledged quarterly compensation forlosses incurred under the price cap. Of note,our commodity strategist expects Brent to average $100/bbl forthe yearif the ME tensions impact oil balances into 3Q and to average around US$130/bbl if the disruptionsextend into 4Q. The downside risks include any announcement by gov’t on banning exports of refined products. According to ourcommodity strategist,we note that Brent crude oil prices could easilyaverage $100/bbl if the duration and breadth of the conflict expand well beyond ourtwo central cases (a substantial deficit in 1H26 of 1.1 mn b/d, but volumes tonormalize by 2H26) and into the summer. One of the more concerning aspects of thewar is that Iran’s own oil production and exports could be permanently damaged if theUS decides to attack Kharg Island, as President Trump has threatened to do. Shouldthe conflict expand beyond the summer and into 4Q26, we would expect majordisruptions to supply a much bigger blow to the global economy. Brent crude oil pricesin this case would likely near $130/bbl on average, with prices likely peaking above$200/bbl. Exhibit1: Any extended disruption in the Strait of Hormuz has a significant impact to globalenergy supplies2025 share of global seaborne volumes transported via Strait of Hormuz Any extended disruption in the Strait of Hormuz has a significant impact to globalenergy supplies (Exhibit 1). Looking closely at the share of global seaborne volumestransported via the Strait of Hormuz, we note that both crude oil and naphtha capturethe larger shares, with seaborne jet fuel going through the seaway also exceeding20% of global supplies. Gasoline is, in contrast, the least impacted petroleum productand the one that has also reacted less to the shock. Share of world crude production as of 2024 Global crude oil S/D balance estimates, mn b/d Exhibit4: Key political and energy flashpoint scenariosOur baseline “Regime alteration” scenario is now less likely; thus, we set a new baseline that allows for supply losses into 2Q26 and introduce two new “regime hard-lining” scenarios with extended military operations and damage to infrastructure spilling into 3Q26 and into 4Q26 Exhibit6:Damage to energy assets seems limited so far,and a quick restart in 2 to 4 weeksofmost should be feasible once the war endsSome energy infrastructure impacted by the conflict Exhibit5:One of the more concerning aspects of the war is that Iran’s own oil production andexports co