Saudi Aramco's recent decision to halt LPG exports from its Juaymah terminal in eastern Saudi Arabia has sent ripples through the global energy market. On February 23, a structural failure in the delivery system, involving a trestle that carries propane and butane pipes, caused the company to activate its emergency response plan. This incident has led to the cancellation of propane and butane deliveries from Juaymah for the next few weeks, while the full extent of the impact is still being assessed.
Despite no leaks or injuries, the disruption has had a significant effect on the market. Propane futures for March on the Far East index surged nearly 5% after the Asian market close, reaching above $590 per tonne, the highest level since early April 2025. This surge highlights the critical role Saudi Aramco plays in the global supply chain, particularly for buyers in Japan, Korea, China, and India, as well as the broader implications for the region's energy trade.
The Juaymah terminal, located near the Jafurah gasfield and Aramco's Ras Tanura refinery, is a key player in the liquefied natural gas (LNG) industry. It is one of the world's largest exporters of LNG, which includes propane and butane. The halt in deliveries has come at a crucial time, as Saudi exports are essential for these markets.
In 2024 and 2025, average monthly exports of LPG from Juaymah averaged about 450,000 tons. Last year, India received at least 60% of these exports, while China accounted for around 15%. The sudden halt in deliveries has undoubtedly caused a ripple effect, impacting the availability of these essential energy resources for various industries and countries.
As the situation unfolds, the energy market awaits further updates from Saudi Aramco, hoping for a swift resolution to this crisis.
