Saudi Aramco has extended its suspension of liquefied petroleum gas (LPG) deliveries from the Juaymah terminal through May, prolonging a significant supply disruption for Asian markets.
This situation began in late February 2026, when a logistics accident damaged a key support structure at the Juaymah NGL export terminal. The impact was immediate. With one of the world's largest LPG exporters suddenly offline, Asian propane prices jumped over 11% in a single day. This wasn't just a paper market reaction; physical supply chains were thrown into disarray as scheduled cargo loadings for March were canceled.
The causal chain of events unfolded logically. First, the initial cancellations, affecting as many as 10 large gas carriers bound for India, created an immediate supply hole of nearly half a million metric tons. Second, Asian buyers had to scramble for replacement barrels. This sent them looking to the Atlantic Basin, primarily the United States. The price difference between the US and Asia, known as the 'arbitrage', widened significantly, making it profitable to ship LPG over long distances. We saw ships literally rerouting mid-journey to the US to pick up these alternative cargoes. Third, the high prices triggered a response from industrial users. Petrochemical plants in Asia, which use LPG as a raw material, began switching to cheaper alternatives like naphtha, leading to what is called demand destruction.
Aramco's decision to extend the suspension into May confirms that the repair work is more complex than initially hoped. The market now understands this isn't a short-term hiccup. The extension solidifies the expectation that the Saudi Contract Price (CP), a key benchmark for Asian LPG, will remain firm. It also means that the high utilization of Very Large Gas Carriers (VLGCs) on the long-haul US-to-Asia route will continue, keeping freight rates elevated.
Ultimately, this is a story about a critical logistical bottleneck, not a shortage of the resource itself. The gas is there, but the primary export route is blocked. Until the Juaymah terminal is back online, Asian markets will remain reliant on more distant and expensive supplies, keeping prices firm and supply chains tight through the early summer.
- LPG (Liquefied Petroleum Gas): A fuel gas containing propane and butane, used for heating, cooking, and as a petrochemical feedstock.
- Saudi CP (Contract Price): The benchmark price for LPG set monthly by Saudi Aramco, which heavily influences prices across Asia.
- Arbitrage: The practice of buying a commodity in one market and simultaneously selling it in another market at a higher price, profiting from the temporary difference in prices.