Cut off from Middle East naphtha due to the Iran war, Asian producers of plastics and packaging face surging premiums that are already hitting output at petrochemical plants, reports Reuters.

Benchmark prices for first-half May cargoes soared to around $1,300 a ton, nearly double pre-war levels.

The rush to source naphtha sent the prompt-month spread to a record $137 a ton in backwardation, LSEG data showed, meaning prompt prices are higher than those for future months.

The Gulf supplies 60 per cent of Asia’s naphtha imports, or about 4 million metric tons (36 million barrels) per month while the US and Europe can typically supply about 2 million tons.

Russia fulfils roughly 14pc of Asia’s import needs at some 1-1.2 million tons.