Sonatrach Raises Propane Price $25/Ton for February, Largest Increase in Months
Takeaway
LPG feedstock costs across the Mediterranean are likely to remain elevated through at least March. Petrochemical producers in Turkey, Spain, and Southern Europe should plan for compressed margins. Commodity traders may find widening arbitrage opportunities between Atlantic and Asian LPG benchmarks. The March OSP announcement will set the direction for Q2.
Sonatrach has raised its official selling price for propane by $25 per ton to $500 and butane by $5 per ton to $490 for February 2026 deliveries. The propane increase is the largest month-on-month adjustment in several months.
$500/t
Propane price
+$25 from January
$490/t
Butane price
+$5 from January
Source: Zawya (Reuters)
Sonatrach's official selling prices serve as the benchmark for LPG pricing across the Mediterranean basin, the Black Sea region, and Turkish markets. Changes to Algerian OSPs typically set the floor for regional pricing.
The $25 propane increase, compared with just $5 for butane, points to specific tightness in propane markets. Global propane supply has been constrained by strong demand from Chinese PDH (propane dehydrogenation) plants and reduced U.S. Gulf Coast export availability. Weather-related disruptions in January shut down several fractionation facilities along the Gulf Coast, limiting U.S. propane flows to export terminals.
Saudi Aramco announced a parallel LPG price increase for February. When both the Middle East's and North Africa's largest LPG exporters raise prices in the same month, it typically reflects broad supply tightness rather than producer-specific factors.
Mediterranean petrochemical producers use propane and butane as feedstock for cracking operations. Q1 is typically when crackers increase throughput ahead of peak summer demand for derivatives including polypropylene and polyethylene. Higher feedstock costs during the ramp-up period will compress cracker margins unless product prices rise proportionally.
The March OSP announcement will indicate whether the tightness is persisting or easing. A hold or further increase would suggest the supply squeeze extends into Q2. Current forward curves have not fully priced in that scenario.