Saudi Aramco holds LPG OSPs steady for May, Sonatrach cuts prices by 2% to 18%

• Sonatrach cut propane prices by $150/ton to $700 and butane by $20/ton to $880, reflecting market pressures from oversupply and reduced demand
• Saudi Aramco's stable pricing serves as the reference benchmark for Middle East to Asia-Pacific LPG contracts
• LPG is primarily used for vehicle fuel, heating, and petrochemical feedstock production

Summary: Saudi Aramco Maintains LPG Prices While Sonatrach Cuts Sharply

Key Price Actions:

Saudi Aramco held its May liquefied petroleum gas (LPG) official selling prices (OSPs) steady, maintaining propane at $750 per metric ton and butane at $800 per ton. In contrast, Algeria's Sonatrach implemented significant cuts, reducing propane prices by $150/ton to $700 and butane by $20/ton to $880—representing decreases of 18% and 2% respectively.

Market Drivers:

The divergent pricing strategies reflect current market conditions of higher global LPG supply and weaker demand, according to traders. Sonatrach's aggressive price reductions suggest attempts to remain competitive in a softening market environment.

Companies and Products:

• Saudi Aramco: Saudi Arabia's state oil producer, maintaining price stability
• Sonatrach: Algeria's national oil company, pursuing competitive pricing through cuts
• Products: Propane and butane, both LPG variants with different boiling points used for automotive fuel, heating, and petrochemical feedstock

Market Implications:

Saudi Aramco's OSPs serve as key benchmarks for LPG supply contracts from the Middle East to Asia-Pacific markets, while Sonatrach's prices guide Mediterranean and Black Sea region markets, including Turkey. Aramco's price stability may signal confidence in Asian demand, while Sonatrach's cuts could pressure regional pricing and reflect more acute oversupply concerns in European-adjacent markets.

The pricing split between these major suppliers highlights regional market differences, with implications for LPG consumers and petrochemical producers in their respective spheres of influence. The divergence may create arbitrage opportunities between regions.