Taiwan’s Growing Reliance on Russian Naphtha Raises Security and Trade Concerns
Taiwan imported $1.3 billion worth of naphtha from Russia in the first half of 2025, more than from any other country, according to a new report. The development highlights a complex trade-off for Taipei as it balances its strong opposition to Moscow’s war in Ukraine with the economic need to secure critical energy supplies for its manufacturing-driven economy.
The findings, published by the Centre for Research on Energy and Clean Air (CREA), reveal how deeply Taiwan’s petrochemical and semiconductor industries depend on Russian imports—even as the island aligns itself with democratic partners in imposing sanctions against Russia.
Why Naphtha Matters to Taiwan’s Economy
Naphtha, an oil derivative, is a key feedstock in the petrochemical sector, used to produce essential raw materials for plastics, electronic components, and, most critically, semiconductors. Taiwan is the world leader in advanced chip manufacturing, and any disruption to naphtha supplies could ripple through its economy and global tech supply chains.
From January to June 2025, Taiwan imported 1.9 million tonnes of Russian naphtha, the report said. The dollar value of its average monthly purchases jumped nearly six times higher compared to 2022 levels. Since Moscow’s invasion of Ukraine in early 2022, Taiwan has spent more than $4.9 billion on Russian naphtha imports.
The Geopolitical Risk: China’s Shadow
Analysts warn that Taiwan’s heavy reliance on Russian energy imports leaves it vulnerable to potential geopolitical pressure from China, which claims the self-governing island as its own territory despite never having ruled it.
Beijing maintains close ties with Moscow, and observers fear that China could leverage its relationship with Russia to disrupt Taiwan’s energy supplies during a period of heightened cross-strait tensions.
Puma Shen, a legislator from the ruling Democratic Progressive Party (DPP), voiced concern, saying:
“Taiwan’s reliance on Russian energy poses a threat to national security, especially given the strategic alliance between Russia and China.”
Taiwan’s Sanctions Dilemma
Since the start of the Ukraine war, Taiwan has publicly joined Western-led sanctions against Moscow, including export restrictions on advanced technology and components. However, unlike the United States, the European Union, and some of its other democratic partners, Taipei has not banned Russian fossil fuel imports.
Taiwan’s Ministry of Economic Affairs stated Thursday that state-owned enterprises had already stopped sourcing Russian crude oil in 2023. The ministry emphasized that Taiwan has also stopped exporting high-tech products to Russia and will continue reviewing compliance measures.
In its statement, the ministry added:
“As international sanctions continue to expand, the ministry will further review relevant control measures and engage with domestic companies on compliance, while continuing to work with international partners to demonstrate Taiwan’s firm resolve to oppose aggression and uphold the international order.”
The United States’ Growing Pressure
The report on Taiwan’s Russian imports comes as US President Donald Trump intensifies warnings against countries purchasing Russian oil and petroleum products. Recently, he criticized European nations for continuing their purchases and stressed that Washington would not expand sanctions on Moscow unless they cut ties to Russian energy.
In August, the US even imposed secondary tariffs on India over its continued reliance on Russian crude. Against this backdrop, Taiwan now faces potential diplomatic friction with Washington.
This week, Taipei also pushed back against comments from US Secretary of Commerce Howard Lutnick, who suggested Taiwan should shift half of its chip production to the United States. Taiwanese officials said such demands were “unrealistic” and reaffirmed their commitment to maintaining Taiwan as the heart of the global semiconductor industry.
Industry at the Center: Formosa Petrochemical’s Role
The CREA report highlighted that while Taiwan’s state-owned CPC Corporation stopped importing Russian naphtha in mid-2024, private-sector giant Formosa Petrochemical sharply increased its purchases.
One refinery on Taiwan’s western coast reportedly boosted its reliance on Russian naphtha from 9% before the invasion of Ukraine to 90% in the first half of 2025, accounting for 96% of Taiwan’s total imports during that period.
Formosa, however, disputed parts of the report. In a statement, the company said Russian naphtha accounted for around 85% of its imports this year, according to its internal figures. It emphasized that all supplies are sourced through open bidding processes and must comply with international sanctions and regulations.
The company added:
“The higher share of Russian imports reflects global market conditions, not our procurement strategy. If international rules tighten further, or should our government impose new restrictions, we will comply immediately.”
Rising Competition in the EV and Energy Market
The backdrop to Taiwan’s naphtha dilemma is the global shift in energy markets. While Russian energy continues to find buyers in Asia, China has also increased its reliance on discounted Russian crude and refined products.
At the same time, Chinese companies like BYD are gaining ground globally, particularly in Europe’s EV market. This intensifies competitive pressure on Taiwan’s industries, which rely heavily on petrochemicals as part of their supply chains.
Balancing Security, Reputation, and Economics
The controversy over Russian naphtha underscores the tension between Taiwan’s democratic identity and economic pragmatism. On one hand, Taiwan wants to stand firmly with its allies against authoritarian regimes. On the other, its industries depend on uninterrupted energy supplies that are currently being sourced, in large part, from Russia.
Legislator Puma Shen cautioned that Taiwan’s actions could affect its international reputation:
“The global community of democracies has relied on sanctions to pressure Russia. Taiwan’s trade decisions must align with our partners, or we risk damaging our credibility on the world stage.”
As Taiwan looks ahead, it faces a delicate balancing act: securing enough energy to sustain its role as a global tech hub, while also proving to its allies that it can fully align with democratic values and international sanctions.
Conclusion
Taiwan’s surging imports of Russian naphtha have sparked an urgent debate over energy security, economic stability, and foreign policy alignment. With nearly $5 billion spent on Russian oil derivatives since 2022, Taipei is now grappling with both domestic scrutiny and international pressure.
As geopolitical rivalries deepen—with China watching closely and the US demanding more alignment—Taiwan’s energy choices will play a decisive role in shaping not just its economy, but also its standing among global democracies.
For now, the island’s reliance on Russian naphtha highlights the fragile intersection of commerce and security in one of the world’s most strategically important regions.