Saudi Aramco Changes LPG Prices for Overseas, Impact Prices in Belgium
Saudi Aramco Changes LPG Prices for Overseas, Impact Prices in Belgium

Saudi Aramco Changes LPG Prices for Overseas, Impact Prices in Belgium

  • 17-Mar-2025 8:15 PM
  • Journalist: Jung Hoon

At the start of March 2025, the price of liquefied petroleum gas (LPG) in Belgium was still falling, with both butane and propane seeing significant drops.  Due to a change in the fundamentals of demand, butane prices have surprisingly shown a notable reduction when compared to propane prices.  The demand for the downstream blending fuel has drastically decreased as the weather has changed from winter to summer, which is also reflected in the dynamics of butane prices.

Key Takeaways: 

  • LPG prices in Belgium have dropped following Saudi Aramco's decision to reduce the official selling price (OSP) of propane and butane.
  • Remarkably, the price drop of butane was significantly higher than the price drop of propane as the winter season transitioned into spring.
  • The consistent drop in the feedstock crude oil prices lowers the manufacturing costs.

As per ChemAnalyst, the LPG prices in Belgium are further expected to showcase a downward trend in April 2025 on the back of ease in supply pressure. In the recent development, the Pana Canal Authority has explored the feasibility of a 1 million barrels per day LPG pipeline connecting the Caribbean Sea and the Pacific by this summer. As soon as the board approval is secured, the project can proceed to the next phase which could ease the global supply dynamics of LPG.

While talking about the current market dynamics, the LPG prices in Europe have continued to decline where butane prices have significantly declined by 7.9% and butane prices have declined by 2.1% in just the first two weeks of March 2025. The sustained decline in feedstock crude oil prices has consequently lowered manufacturing costs. Early in March 2025, Saudi Aramco lowered the official selling prices of butane and propane due to the drop in feedstock prices.

Notably, the disparity in price reduction between butane and propane indicated a significant shift in demand dynamics. As the winter season recedes, the demand for heating fuel has diminished, alongside a reduction in downstream blending activities which further lowers the LPG demand.

Meanwhile, the European LPG supply landscape was configured as balance-to-tight due to constrained supply from the USA. Despite increasing temperatures, which resulted in a decrease in demand for butane and propane, the supply gap has arisen amid limited supply opportunities to Europe due to diverted substantial volumes eastward, Asia. However, the consistent decline in feedstock crude oil prices has served to mitigate the impact of the tight supply pressures by lowering manufacturing costs.

Additionally, the recent peace agreement in Gaza has helped to relax global logistics, which has led to a drop in shipping costs. The LPG market, which had been struggling with high transportation costs, has seen some respite as a result of this breakthrough.

Tags:

LPG Prices

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