Saudi oil giant, Aramco, and Algerian state owned energy firm, Sonatrach, have reduced their official selling prices (OSPs) for liquefied petroleum gas (LPG) for May, reflecting increased global supply and softer market sentiment.
According to trading sources on Monday, Aramco’s May OSP for propane dropped by $5 to $610 per metric ton, while butane prices saw a sharper cut of $15, bringing the new rate to $590 per ton.
On its part, Sonatrach made even deeper cuts, reducing its propane price by $60 and butane by $55, bringing both to $490 per ton.
The Algerian oil and gas firm larger price reductions come amid growing availability of LPG cargoes in the Mediterranean and Black Sea markets.
The company’s prices are widely used as benchmarks in these regions, including Turkey, where buyers rely on Sonatrach’s OSPs to structure contracts and gauge market direction.
One North African energy trader, who preferred not to be named, noted that Sonatrach’s aggressive price cuts suggest weaker regional demand and excess supply.
“We’re seeing more spot cargoes than usual and less buying interest from major consumers,” he said.
Another trader dealing in Mediterranean supplies stated that the price drop was expected. “Sonatrach had to respond to the increasing global inventory levels and cheaper alternatives available to some buyers,” he said.
Meanwhile, Sonatrach has not issued an official press statement, but traders noted that the price list was circulated to clients early Monday.
Aramco’s pricing signals Asia pacific trend
Aramco’s LPG prices, which serve as the benchmark for shipments from the Middle East to Asia Pacific, also reflected the broader supply demand dynamics in the global market.
While Aramco’s price cuts were more moderate compared to Sonatrach, industry participants said they signal a possible slowdown in Asian demand ahead of the summer months when heating related consumption typically declines.
“Demand from key buyers like China and India has been steady but not enough to absorb the extra barrels hitting the market,” a trader in Singapore told reporters.
Propane and butane, the two main types of LPG, differ in their boiling points and are used for heating, cooking, automotive fuel, and as feedstock for petrochemical production.
Their prices often move in tandem, influenced by seasonal demand and global inventory levels.
Market watchers said both Sonatrach and Aramco will continue to monitor global trends in the coming weeks as they prepare for June pricing, which could reflect further adjustments if current supply trends persist.
