Saudi Aramco Halts LPG Deliveries Through May Following Damage to Juaymah Facility

Saudi Aramco Halts Liquefied Petroleum Gas Shipments Amid Ongoing Disruptions

Saudi Aramco, the state-owned oil producer, has informed buyers that it will suspend shipments of liquefied petroleum gas (LPG) from its main export facility, Juaymah, through May. The decision comes after damage to the facility in late February cut off supplies of the fuel, resulting in higher prices and a scramble for replacement supplies.

The incident, which occurred before the Middle East war started in February, sent shockwaves through the market, causing energy shortages in Asia and an LPG crunch in India, where the fuel is widely used for cooking. The closure of the main export route through the Strait of Hormuz, which has been near closure since the conflict began, has further exacerbated the situation.

According to sources familiar with the matter, Aramco has been unable to carry out necessary repairs at the Juaymah facility, which has led to the suspension of shipments. Even if the Hormuz strait were to open, there would be no deliveries next month, as the facility is not operational.

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The February incident caused a major disruption to a niche segment of the oil market, with Aramco being a key global supplier of propane and butane, fuels known as LPG. The closure of Hormuz has further disrupted supply from elsewhere in the Middle East, causing major shortages of the cooking fuel in India.

Aramco's Juaymah facility accounts for 3.5% of total waterborne LPG exports for the global market, according to analysts at Kpler. The facility, located along the Persian Gulf coast near the company's biggest export terminal for crude and oil products at Ras Tanura, has been severely impacted by the conflict.

The Saudi energy ministry earlier this month reported that processing facilities at Juaymah suffered fires during attacks amid the regional war, without disclosing the extent of damage. Aramco had previously stated on February 26 that shipments from Juaymah "scheduled for the next few weeks will be canceled," without providing further details.