Propane Price 2026— Asia's Scramble for American LPG

Highlights

• US propane at Mont Belvieu, Texas, rose to US$1.10 a gallon on 16 October. That is 72.77 per…
• The rally is a product of the Iran war. Disrupted shipments through the Strait of Hormuz have sent…
• The move matters well beyond Texas. Chinese plastics makers, Japanese importers and Australian motorists all price LPG off…
• Mont Belvieu, east of Houston, is the main US storage and trading hub for natural gas liquids. Its…

US propane at Mont Belvieu, Texas, rose to US$1.10 a gallon on 16 October. That is 72.77 per cent above where it started the year and 71.83 per cent higher than a year ago. Prices jumped 9.54 per cent in a single week.

The rally is a product of the Iran war. Disrupted shipments through the Strait of Hormuz have sent Asian buyers of liquefied petroleum gas (LPG) to the US Gulf Coast. American export terminals have run at record rates.

The move matters well beyond Texas. Chinese plastics makers, Japanese importers and Australian motorists all price LPG off the same disrupted market.

What Mont Belvieu prices

Mont Belvieu, east of Houston, is the main US storage and trading hub for natural gas liquids. Its propane price is the benchmark for American wholesale supply.

Propane is a heating fuel and petrochemical feedstock, traded worldwide as LPG. In Asia, Saudi Aramco's monthly contract price (CP) sets the tone.

The Iran war rerouted global LPG

On 2 March, days into the war that Mont Belvieu propane jumped more than 9.6 per cent in one morning. The Middle East supplied about 30.5 per cent of world LPG exports in 2025, according to Kpler data it cited.

That supply has not come back. Middle East LPG exports to Asia were about 4m tonnes a month before the war. OPIS, citing Vortexa, said they have not exceeded 1.5m tonnes since.

American exporters filled the gap. The EIA said US propane exports averaged about 2m barrels a day in the first half, up 11 per cent. S&P Global Commodities at Sea put September exports at a record 2.2m barrels a day.

Why prices surged this month

September laid the ground. Mont Belvieu propane averaged 81 cents a gallon that month, up from 69 cents in August, according to Platts data cited by IndexBox. Aramco then raised its October propane CP by US$55 to US$680 a tonne.

October brought a second leg. Brent crude settled at US$109.86 a barrel on 16 October, its highest since May, after a missile was aimed at Saudi Arabia's Yanbu port.

US inventories also turned. RBN Energy said propane stocks fell 1.5m barrels to 106.4m in the week to 9 October, roughly twice the expected draw.

Ample stocks and a mild winter cap the outlook

Stocks remain 14 per cent above the five-year average, according to RBN. The whole surplus sits on the Gulf Coast, while Midwest stocks are below normal.

Winter may not help. On 15 October, US forecasters at NOAA cited a very strong El Niño and a warmer winter across the Midwest and much of the East.

The EIA's October outlook projected Mont Belvieu propane at 78 cents a gallon in the fourth quarter and 69 cents in 2027. Both are well below current prices.

Asia's buyers: China's plastics plants hit hardest

China's propane dehydrogenation (PDH) plants, which turn propane into plastics feedstock, felt the squeeze first. Iran exported 11.35m tonnes of LPG in 2025, with 84.4 per cent going to China, citing Vortexa.

The US blockade of Iranian ports cut that flow. Chinese PDH run rates fell to 47 per cent in April, before recovering to 63 per cent by June. China's 10 per cent tariff on US propane, in place since May 2025, has kept it a smaller buyer of American cargoes, the EIA said.

Japanese buyers pay heavily for the long route. Freight from Houston to Chiba hit a record US$330 a tonne in late September, according to AEGIS Hedging.

Australia: an exporter that pays world prices

Australia exports LPG, and the war has lifted demand for its cargoes. Shipments to Indonesia have at least tripled from 2025, the Australian embassy in Jakarta said in June. The cargoes come from the INPEX-operated Ichthys project.

What could go wrong

A Gulf settlement is the biggest downside risk. If Middle East LPG returned to Asia, the premium on US cargoes could fade quickly.