Saudi Arabia’s state oil company Aramco and Algeria’s national energy firm Sonatrach have reduced their official selling prices (OSPs) for liquefied petroleum gas (LPG) in November, reflecting an increase in global supply and lower oil prices, according to traders. The cuts ranged between 3.2% and 4.0%, highlighting a broader market adjustment amid fluctuating energy demand.

The Saudi Aramco logo is pictured at Hyvolution exhibition in Paris, France, February 1, 2024.

For November, Aramco lowered its propane price by $20 per metric ton to $475 per ton and its butane price by $15 per ton to $460 per ton. These reductions follow a decline in international crude prices and rising availability of LPG from various producers. Propane and butane, the two main components of LPG, differ in boiling points but share wide applications, including use as fuel for vehicles and heating, as well as feedstock in the petrochemical industry.

Meanwhile, Algeria’s Sonatrach also revised its November prices. The company reduced its propane OSP by $15 per ton to $455 but maintained its butane price at $465 per ton. The adjustments from both producers reflect current market dynamics, where supply growth has outpaced demand, particularly in the Asian and European markets.

Aramco’s OSPs serve as key references for long-term LPG supply contracts from the Middle East to the Asia-Pacific region. These prices are closely watched by importers across Asia, including Japan, South Korea, and China, as they influence regional trade and contract negotiations. Sonatrach’s OSPs, on the other hand, are used as benchmarks in the Mediterranean and Black Sea regions, including markets such as Turkey.

The downward price adjustments indicate a competitive pricing environment as producers respond to global oversupply and moderate consumption levels. Analysts note that the decline in LPG prices could benefit importers by lowering energy costs, although it may also reduce export revenues for producers.

Overall, both Aramco and Sonatrach’s November price revisions underscore the influence of shifting global oil and gas market conditions. With inventories building up and demand growth easing, producers are expected to maintain flexible pricing strategies to balance exports and sustain market share across key regions. The market will continue to monitor further developments in global supply and energy consumption trends in the coming months.