Aramco’s surprise LPG price cut to ramp up competition for sales.
Saudi Arabian Oil Co cut prices for liquefied petroleum gas to the lowest since August 2023, a move that could help bolster sales of the widely used cooking fuel amid rising competition with rivals.
The Middle Eastern energy giant reduced benchmark Saudi contract prices for propane and butane to US$495 (RM2,084.69) and US$475 a tonne respectively for October. That’s lower than expected, according to traders who monitor the flow. The move came at a time when term buyers had been hesitant to commit to similar quantities from Aramco in 2026 as they had taken this year, they said.
The global energy market is in flux at present, with Saudi Arabia — a de facto leader of the Opec+ oil group — backing a bold strategy of increasing production in a push to recapture market share. LPG is linked to global oil and gas markets as it’s a by-product of crude refining and natural-gas processing.
A Saudi contract price that’s US$50 a tonne lower than anticipated signals a “supply battle” between the Middle East and the US, according to Samantha Hartke, head of market analysis for the Americas at Vortexa Ltd. The US sent a record volume of LPG to Indonesia last month, which — India aside — is the “real battleground” between the two largest exporting regions, she said.
Source: Theedgemalaysia