Hormuz Crisis Shifts Global LPG Trade to US Dominance
The Strait of Hormuz has brought global LPG trade to a standstill due to Iranian attacks on vessels, causing a ripple effect in supply chains. The US is now leading the world in LPG exports, outpacing other countries like Saudi Arabia, Qatar, and Iran.
Before the war, around 54 oil, chemical, and LPG tankers passed daily through Hormuz. However, during the height of the conflict in early March, traffic plummeted to an average of 11 vessels per day.
The strain on the LPG market has been visible, with propane prices from the Texas Gulf Coast rising by almost 10% in February. By mid-June, the cost of propane per gallon was up roughly 25% from pre-war prices.
US exports have realigned the logistics of LPG trade due to lower risk and potentially lower insurance costs. The US has become a powerhouse driving global LPG trade, with analysts projecting steady expansion in the market.