Surprising Discount on LPG from Saudi Aramco for October 2023

Surprise LPG Price Cut from Saudi Aramco

Saudi Arabia's national oil company Aramco has cut liquefied petroleum gas (LPG) prices to their lowest level since August 2023. This strategic move aims to boost fuel sales in an increasingly competitive environment.

What are the New LPG Prices?

The Saudi oil giant set the reference contract prices for October at $495 per ton for propane and $475 per ton for butane. These figures came in below market expectations.

Market Fluctuations

Global energy markets are currently going through an uncertain period. Saudi Arabia, the de facto leader of the OPEC+ group, is implementing a bold strategy to increase production levels to gain market share. LPG, as a byproduct obtained from both oil refineries and natural gas processing, is directly linked to global oil and gas prices.

Competition with the USA

Samantha Hartke, Head of Americas market analysis at data analytics firm Vortexa, states that Saudi Arabia's contract prices being $50 per ton lower than expected signifies a 'supply war' between the Middle East and the USA. Hartke noted that the US shipped a record amount of LPG to Indonesia last month, indicating that the ultimate area of competition is intensifying there.