Yanbu LPG Loadings Slow Amid Red Sea Attacks

LPG loadings at Saudi Aramco’s Yanbu terminal have slowed since late July amid market uncertainty following Houthi attacks on commercial vessels in the Red Sea, shipping sources told OPIS.

Shipbrokers said the last loading was the NY Lord very-large gas carrier, which loaded a cargo on July 28 before rerouting north via the Suez Canal to avoid the high-risk zone. No further Yanbu loadings have been heard since, and traders have reported no fresh discussions to fix Yanbu cargoes.

Following the collapse of Saudi Aramco’s Juaymah NGL pipeline in late February, the Yanbu terminal increased loadings to compensate for the loss in export capacity, averaging around five to six cargoes monthly.

Five cargoes were loaded in July, but most were lifted during the first half of the month before the Houthi attacks escalated.

Vortexa data shows LPG exports from Yanbu are currently estimated at 91,500 metric tons in August, down from 296,900 mt in July.

OPIS earlier reported that ship-to-ship or STS transfer discussions have largely faded since mid-July amid renewed U.S.-Iran tensions. Asian buyers have instead relied on Kuwait Petroleum Corp.’s DES tenders for Middle East cargoes. The DES trend emerged in late June to facilitate cargo sales by shifting shipping risks from buyers to sellers.

KPC issued one DES tender in late June and seven in July, and recently issued its first August tender offering a 44,000 mt evenly split LPG cargo for second-half August delivery into the Singapore-to-Japan range. The tender closes Tuesday.

“With Yanbu down, KPC may take this opportunity to supply more to Asia by issuing additional DES tenders,” one analyst said.

Market participants said they were not surprised by Saudi Aramco’s higher August Contract Prices or CPs, as the Juaymah pipeline outage, slower Yanbu loadings and drop in STS activity have further tightened Middle East LPG supply and reduced export flexibility.

Saudi Aramco last Thursday raised its August CPs to $620/mt for propane and $640/mt for butane, up from July’s $580/mt and $600/mt, respectively.

Total Middle East LPG exports are projected at 1.73 million mt in August, down sharply from the pre-conflict monthly average of 3.5-4 million mt, according to Vortexa.

—Reporting by Cheryl Lee, clee@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com