RIYADH: Saudi Aramco has reduced its official selling prices for liquefied petroleum gas for August 2025.

The state energy giant on Thursday set propane at $520 per tonne and butane at $490 per tonne — both down $55 from July.

The cuts reflect rising global production, particularly from the US and other Middle Eastern producers, and persistently high inventories following a milder-than-expected 2024-25 winter.

LPG, which includes propane and butane, is widely used for residential heating, cooking, transportation, and petrochemical feedstocks. Aramco’s monthly prices serve as a benchmark for exports from the Gulf to Asia, the world’s largest consuming region.

The price drop comes as warmer summer weather continues to curb seasonal demand for heating fuels. At the same time, global energy prices have come under pressure.

The US Henry Hub natural gas spot price slipped to $3.07 per million British thermal units in July 2025, further weighing on LPG markets, as the commodity is a byproduct of both crude oil refining and natural gas processing.

In addition to oversupply, structural shifts are also shaping LPG dynamics. Aramco’s pricing strategy reflects the need to stay competitive in a changing market, with growing pressure from the global energy transition and emerging geopolitical risks that could disrupt trade flows and shipping routes.

China, a major LPG consumer and importer, has also seen weaker demand in recent months. The transition to summer has reduced both residential and industrial heating needs, while rising inventories, logistical bottlenecks such as port congestion, and high storage levels have constrained consumption.

In March 2025, China’s domestic LPG prices fell to $671 per tonne, reflecting weaker demand and increased regulatory scrutiny. The country’s ongoing push toward renewable energy sources and stricter environmental controls has also weighed on LPG use in the petrochemical and manufacturing sectors.

Together, these factors signal a broader market softening that has prompted Aramco’s latest round of price adjustments.