Austin WrightPropane prices along the US Gulf Coast have climbed roughly 25% since February, and the surge traces back to a single geography: the Strait of Hormuz. The Hormuz crisis rewriting global LPG trade has turned what used to be a routine shipping lane into a bottleneck that is reshaping who supplies the world's propane and butane, and at what cost.
How the Strait Closure Choked Off Supply
Before Iranian attacks on shipping escalated, about 54 oil, chemical and LPG tankers moved through the strait each day. By late May that figure had collapsed to an average of 11 vessels daily. Saudi Arabia, Qatar and the UAE, three of the world's biggest LPG exporters, found their cargoes stuck behind a blockade, while even Iranian tankers were turned back by the US Navy. Propane out of the Texas Gulf Coast jumped nearly 10% during the worst of the fighting in early March, and the broader climb to a 25% increase by mid June shows the disruption never really eased. The episode has made an old risk obvious: when so much of the world's LPG has to pass through one narrow channel, any conflict there ripples through kitchens, factories and vehicle fleets thousands of miles away.
The US Became the World's Top LPG Exporter Years Before This Crisis
America's rise to the top of the LPG export table did not happen overnight. The shale drilling boom of the 2000s produced so much propane and butane that domestic buyers could not use it all, and by the 2010s the country had flipped from a net importer to a major exporter. That head start now looks strategically useful. Four countries account for roughly 60% of global LPG supply, yet most of the world, including Asia, Europe, much of South America and parts of Africa, depends on imports to meet rising demand for cleaner cooking, heating and transport fuel. Industry projections point to propane volumes climbing past 213 million metric tons in 2026 and reaching 260 million metric tons by 2031, a trajectory that leaves plenty of room for US barrels to fill gaps left by Gulf disruptions.
Asia is already absorbing more LPG than it strictly needs this year, largely because American shipments have increased so sharply. India, a country that has long relied on Middle Eastern suppliers, is now buying more US propane instead. Separately, sanctions imposed on Russia after its invasion of Ukraine pushed Moscow's LPG trade away from Europe, and European buyers have responded by turning to American supply as well. Layered on top of the Hormuz disruption, these shifts are pulling trade patterns further away from the traditional Middle East centered map.
Currency and freight economics matter here too. A weaker dollar can make US commodity exports more attractive to foreign buyers, and lower perceived shipping risk out of Gulf Coast ports, compared with the elevated insurance costs now attached to Arab Gulf cargoes, has quietly shifted the calculus for buyers weighing where to source their next shipment.
Traders With Flexible Fleets Are Filling the Gaps
Physical commodity traders, not just producing nations, are determining who actually gets fuel during the disruption. BGN Group, an LPG focused trading firm, was reportedly the largest offtaker of US sourced LPG in 2025, moving more than 10 million metric tons annually through a Houston based subsidiary and its own fleet of vessels. Petredec has emerged as another major buyer of American propane, while Japan's Mitsui continues supplying fast growing demand across the Far East. These firms matter because pipelines and refineries cannot reroute themselves. It takes ships, contracts and traders willing to redirect cargoes on short notice to keep supply moving when a chokepoint like Hormuz seizes up.
What the Realignment Means Going Forward
The broader commodity picture offers some context for how markets are absorbing the shock. Crude oil, tracked broadly through the USO ETF, has seen its own volatility tied to the same Hormuz tensions driving LPG prices higher, while a softer dollar has generally supported dollar denominated commodity exports of all kinds. For LPG specifically, the practical result is a market where American supply, Asian demand and private trading fleets increasingly matter more than the traditional Gulf producer to European or Asian buyer relationship. Whether the Strait of Hormuz reopens to normal traffic soon or remains constrained for months, the trade flows built during this crisis, US barrels moving east, traders rerouting cargoes away from Gulf risk, may not simply snap back once the immediate danger passes.
