Propane Prices Surge: Record Exports Drain U.S. Supply

The Situation

Mont Belvieu spot prices jumped 12% to $0.89/gal this week, fueled by record-breaking 1.8M bbl/day LPG exports to Asia. Retailers relying on spot purchases are feeling immediate pain, and fall fill programs priced just two weeks ago are already underwater.

The Facts

### Speed Shocked Traders Mont Belvieu closed at $0.891/gal, up from $0.791 in just seven trading days. This marks the largest weekly move since February 2024. LPG exports hit an unprecedented 1.8M bbl/day, shattering the previous record of 1.65M from March 2025.

### Inventory Trajectory Worries The EIA reports 58.2M barrels in stock — 8% below the 5-year average. Inventory builds are running 15-20% below the seasonal pace for four consecutive weeks. Midwest rack premiums have widened to $0.06–$0.09/gal, while the Northeast sees premiums of $0.10–$0.14/gal delivered.

Business Impact

A retailer with 500,000 gallons in annual volume, paying $0.89 instead of $0.79, faces an additional $50,000 in costs. Wholesalers who priced fall pre-buy at sub-$0.80 are now looking at $0.04–$0.07/gal margin compression. This export demand is structural; don't expect a quick reversal.

Key Takeaways

• Export demand at 1.8M bbl/day is a structural, not temporary, shift.
• Lock in fall/winter contracts this week to mitigate risk.
• Midwest rack premiums are the widest they've been since the 2023-24 polar vortex.
• Proactively communicate current market conditions to your top customers.

Competitive Advantage

Retailers who secured summer supply can offer aggressive fall pricing that competitors may struggle to match. Transparent customer communication during periods of volatility builds loyalty that outlasts any price spike.