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

The Situation

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

The Facts

Speed Shock for 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 1.8 million bbl/day, shattering the previous 1.65 million bbl/day record set in March 2025.

Inventory Worries Mount

The EIA reports 58.2 million barrels in stock, which is 8% below the five-year average. Inventory builds have been running 15-20% below the seasonal pace for four straight weeks. Midwest rack premiums have widened to $0.06–$0.09/gal, while the Northeast sees $0.10–$0.14/gal delivered.

Business Impact

A 500,000-gallon annual retailer paying $0.89/gal versus $0.79/gal faces an additional $50,000 in costs. Wholesalers who priced fall pre-buy contracts at sub-$0.80 are now looking at $0.04–$0.07/gal margin compression. This export demand is structural, meaning a quick reversal isn't likely.

Key Takeaways

• Export demand at 1.8 million bbl/day is structural, not temporary.
• Lock fall/winter contracts this week to mitigate further price increases.
• Midwest rack premiums are the widest they've been since the 2023-24 polar vortex.
• Communicate current market conditions proactively to your top customers.

Competitive Advantage

Retailers who locked in summer supply can now offer aggressive fall pricing that competitors on spot can't match. Transparent customer communication during volatility builds loyalty that outlasts any price spike.