The Asian condensate market is bracing for the introduction of a new grade from Saudi Arabia in 2026, which may cause significant pricing disruptions if demand cannot keep pace with the rise in supplies.
Condensate loadings from state-controlled Saudi Aramco's new Jafurah natural gas project should start in the first quarter of 2026, in cargo sizes of 500,000 bl, traders said. Some expect 3-4 spot cargoes a month to be made available.
Jafurah condensate, with an API gravity of 49.75° and sulphur content of 0.16pc, appears to be similar in quality to Australian Ichthys and Qatari condensates, which are rich in naphtha and middle distillates. It may also compete with lighter crudes like US light sweet WTL.
Jafurah's ramp-up speed will be a critical factor for 2026, and some traders think condensate prices will have to be gradually adjusted lower when the new supply comes. Buyers may initially be hesitant to commit to Jafurah condensate given its quality is untested, so its impact on similar-quality grades may not be immediate.
The bulk of condensate produced in Asia-Pacific and the Mideast Gulf goes to the UAE, South Korea, Singapore and China, mostly to splitters.
Any potential price decline next year resulting from more supply may be capped by expectations of condensate offers from Qatar's North Field East (NFE) expansion project emerging only towards the end of 2026, with its effects not anticipated to be felt until 2027. This is perhaps a strategic move aimed at preventing a flood of supply in 2026 that would drive down prices even more, a Singapore trader said. The project is supposed to start up in mid-2026.
State-owned QatarEnergy (QE) has, in the meantime, struck several long-term supply deals with the UAE's Enoc, Japan's Mitsui and a Singapore unit of Shell. "[They have] covered some of their [supply] lengths already, but [there is] still a lot more," a trader said.
QE typically sells its Qatari Low Sulphur Condensate (LSC) and Deodorized Field Condensate (DFC) — also produced at the North Field — via regular tenders, and traders expect condensate from the expansion project to be of similar quality to these.
Qatar is the world's third-largest condensate producer, behind Russia and the US, according to IEA figures, and QE's LSC and DFC account for a quarter of the world's internationally traded condensate. These volumes were nearly 850,000 b/d last year, data from oil analytics firm Vortexa show. Australia is also a major condensate supplier, shipping about 180,000 b/d last year, mainly to Asian buyers.
Demand outlets
One potential source of demand for these new condensates is China, given its need for naphtha as a feedstock for its expanded petrochemical capacities, while middle distillates produced from splitting the condensates can be sold off, traders said. Recent US sanctions on Russia — a major global exporter of naphtha — have made buyers, including China, reluctant to take Russian naphtha.
China imported around 77,000 b/d of condensate last year, Vortexa data show. Iranian sour South Pars condensate accounted for close to 50pc of that, which was probably discounted because of Iranian sanctions, so any replacement supplies would have to be priced competitively for China to consider switching.
Singapore's 70,000 b/d Bukom splitter could be another source of condensate demand once it is properly up and running, traders said, adding to the 237,000 b/d Bukom refinery's purchases of grades like Qatari condensate.
Refiners often view heavy condensates as an alternative to ultra-light crude feedstock and could turn to such supplies if they are priced at a level that makes sense for them economically compared to regular crude grades. In the past, firm prices for light sour crudes like Abu Dhabi Murban had prompted some refiners to turn to Qatari condensates.
Otherwise, Aramco especially may be banking on replacement demand from buyers in South Korea, the UAE and Singapore, hoping to switch some of their purchases away from Qatari and Ichthys condensates, as well as lighter crudes, traders said.
If there is insufficient demand for the additional supplies, some condensates can even be blended with crude to create lighter grades of crude, a Singapore trader said, optimistic that the market will somehow find a way to absorb these extra supplies over the next few years.
