Propane Prices Surge as Record Exports Drain Domestic Supply

The Situation

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

The Facts

Speed Shocked Traders

Mont Belvieu closed at $0.891/gal, up from $0.791 in seven trading days — the largest weekly move since February 2024. LPG exports hit 1.8M bbl/day, shattering the 1.65M record from March 2025.

Inventory Trajectory Worries

EIA shows 58.2M barrels in stock — 8% below the 5-year average. Builds are running 15-20% below seasonal pace for four straight weeks. Midwest rack premiums widened to $0.06–$0.09/gal; Northeast at $0.10–$0.14/gal delivered.

Business Impact

A 500,000-gal annual retailer paying $0.89 vs. $0.79 faces $50,000 in extra costs. Wholesalers who priced fall pre-buy at sub-$0.80 are looking at $0.04–$0.07/gal margin compression. Export demand is structural — don't expect a quick reversal.

Key Takeaways

• Export demand at 1.8M bbl/day is structural, not temporary
• Lock fall/winter contracts this week
• Midwest rack premiums are widest since 2023-24 polar vortex
• Communicate market conditions proactively to top customers

Competitive Advantage

Retailers who locked summer supply can offer aggressive fall pricing competitors can't match. Transparent customer communication during volatility builds loyalty that outlasts the spike.