Asia liquefied petroleum gas prices spike after damage to Saudi facility
Swaps for LPG delivered to East Asia next month soared to more than $600 per ton, their highest since April 1, 2025, after Saudi state energy firm Aramco said it would be canceling some deliveries.
Asian liquefied petroleum gas prices surged to their highest level in almost a year following an outage at an export terminal in Saudi Arabia that supplies major buyers including China, India and Japan.
What happened: Saudi Aramco, the kingdom’s state oil giant, said in a statement Wednesday that the system carrying propane and butane at the Juaymah natural gas liquids facility in eastern Saudi Arabia was found to be structurally damaged on Feb. 23, prompting the state energy firm to cancel some scheduled deliveries. No leaks or injuries were reported, and shipments of LPG from other terminals were unaffected.
Aramco said it immediately activated its emergency response plan and stopped exporting LPG from the facility.
After the news broke Wednesday, swaps for LPG to be delivered to East Asia in March soared to more than $600 per ton, their highest level since April 1 last year. It remains unclear when Aramco will resolve the issue at the facility.
Why it matters: The Juaymah NGL facility has a significant foothold in the global LPG market, handling about 3.5% of all seaborne LPG shipments, according to Kpler, a firm that tracks global energy shipments.
Average monthly exports of LPG from the site stood at around 450,000 tons in 2024 and 2025, Kpler data showed. Dubai-based NitrolTrading told clients in a research note that the outage would heavily impact China, India, Japan and South Korea.
Ciaran Tyler, lead analyst at Kpler's global NGLs & Naphtha Research, told Al-Monitor that he does not know exactly which deliveries were impacted, but Aramco’s cancellation of March loadings suggests it is “a serious issue that won't easily be solved overnight.”
He added that “the biggest mystery right now is the extent of the damage and how long repairs might take to fix the trestle to allow exports to normalize again.”
Tyler believes that repairs will take around three to five weeks, resulting in a loss of 170,000 barrels per day of Saudi LPG exports during this period.
Around 76% of the exports — or 102,000 bpd — go to India, according to Tyler, so the firm expects Indian buyers to bid up US spot cargoes to make up for the loss during that period. Meanwhile, he said that Chinese buyers, which account for 18% — or 30,000 bpd — of exports from the Saudi terminal, will look to alternative stocks in the Middle East, as the 11% tariff on US-origin cargoes still makes them unattractive.
He believes that US propane stocks, which are bloated, will help fill Asia’s supply gap caused by the damage at Juaymah. However, US export terminal capacity constraints until the second quarter mean that if Aramco's force majeure remains in place until late March and affects all Juaymah loadings, the global LPG market will look counter-seasonally tight through March, even as heating demand in the Northern Hemisphere dissipates.
Know more: Saudi Arabia’s key LPG export terminals lie along the country’s east and west coasts and include the Ras Tanura terminal and King Fahd Industrial Port in Yanbu.
Although Saudi Arabia is a key supplier to China — Asia’s largest economy — the United States is the largest LPG exporter to the People’s Republic. In 2024, US LPG accounted for around half of China’s imports of the gas, according to Drewery Maritime Research.
In 2023, Saudi Arabia supplied 3.6% of China’s total propane imports by weight, according to World Bank data.
