Global LPG flows on the road to recovery
Global seaborne LPG exports have recovered back toward the five-year average in May after a sharp disruption due the Middle East Gulf conflict and the strait of Hormuz closure, with flows rebounding to around 4.8mbd on a 28-day moving average basis.
Though this recovery is positive for import starved Asian buyers, the world continues to be short by ~600kbd compared to the historically high levels observed in February 2026. The recovery has been led predominantly by the US, which remains the largest seaborne LPG exporter globally. Other suppliers stepping up include Algeria, Canada, Malaysia, Sweden and Argentina in volumetric order.
Global seaborne LPG exports (bd, 28-day moving average)
Imports should also recover from here on
Global seaborne LPG imports also weakened sharply through April, mirroring the collapse in export volumes. Imports fell well below the five-year average and toward the lower end of the historical range, particularly across Asia, where the blockade of Hormuz has driven supply concerns. However, imports are now expected to recover through the second half of May as export barrels loaded during April begin arriving into destination markets, mainly in Asia.
One area of concern which could limit flows out of the US, is the building congestion around the Panama Canal, which is forcing some vessels to take the longer route around the Cape of Good Hope, when going to Asia. This could slow down the recovery on the import side.
Global seaborne LPG imports (bd, 28-day moving average)
US LPG drives the recovery, at the expense of ethane?
US LPG exports had steadily expanded through 2023–2025 as additional terminal capacity and stronger NGL production supported higher outbound volumes, with combined exports approaching 2.8mbd in April and the momentum seems to have continued into May.
Seaborne exports have ramped up at almost all major LPG export terminals like Enterprise Houston, Energy Transfer Nederland, Targa Galena Park and Phillips 66 Freeport on the US Gulf Coast, as well as Energy Transfer Marcus Hook terminal on the US Atlantic Coast. Also contributing to this surge was the start-up of the Enterprise Neches River Terminal near Beaumont, Texas which was initially scheduled to start-up in June but exported its first cargo in April 2026.
US seaborne LPG exports by origin terminal (bd)
What we observed though was that this surge in LPG exports came at the expense of ethane exports. Some export terminals with flex capacity to load both LPG and ethane pushed out all of the LPG their contracts allowed at the expense of ethane. This was done mainly due sharper price gains in propane with the Mont Belvieu propane-ethane spread widening, reaching over $325/t on May 12th (Argus), incentivizing propane exports over ethane. Energy Transfer Nederland seems to be utilising its 250kbd flex capacity brought online in July 2025 to push out more LPG, while the Enterprise Neches River Terminal is expected to use its flex capacity to export more propane until the 300kbd expansion at the Enterprise Houston terminal comes online later this year.
US seaborne ethane exports by origin terminal (bd)
High VLGC freight has spoiled the party however by pressuring additional spot cargoes out of the US Gulf Coast. Loadings in May are still expected to remain strong, especially for butane, as demand from India and Indonesia remains strong, due to the continued closure of the strait of Hormuz.
Indian LPG imports worst hit by continued Hormuz closure
The surge in US LPG seaborne exports has come just in time for India, which in 2025 received ~90% of its seaborne LPG imports from inside the Straits of Hormuz. Now it is looking toward the US to fulfil the much-needed hydrocarbons instrumental for residential use.
On the demand side, the Indian Government implemented measures to curb commercial consumption in early March while simultaneously ordering domestic refineries to ramp up LPG production. March India LPG domestic production has increased by ~30% m-o-m and ~27% y-o-y to ~524kbd (PPAC), against total consumption of ~911kbd, which dropped by ~13% y-o-y.
Looking forward, the roughly 350-400kbd gap between domestic production and consumption needs could shrink once the 400kbd Nayara refinery restarts in mid-May after maintenance. The restart could add ~45kbd LPG supply to the domestic production balance, while the rest will have to come from seaborne imports or further curtailment of domestic demand.
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