The consulting firm Rystad Energy reported a decrease in demand for liquefied petroleum gas (LPG) at regional steam cracking units by approximately 135,000 barrels per day in March compared to February, with an expected further decline of 35,000 barrels per day in April and 11,000 barrels per day in May.
Regarding cooking gas, demand in India decreased by about 205,000 barrels per day in March. Data from analytics company Kepler showed that LPG exports from the Middle East fell by 73% to reach 419,000 barrels per day in March compared to the previous month.
Argus Pricing agency stated that the supply crisis led to a surge in spot purchase premiums for propane and butane from the Gulf to record levels of $250 per ton compared to Saudi contract prices on March 30. Saudi Aramco sharply increased its official selling prices for April amidst a supply crisis.
Data from the U.S. Energy Information Administration showed that the United States had 48.4 million barrels of propane available for sale as of March 27. Furthermore, traders noted that shipping from the U.S. Gulf Coast to Asia takes over 30 days, a much longer duration than the two-week supply journey from the Middle East, increasing supply pressures amid uncertainty over when Iran will permit the reopening of the strategic Strait of Hormuz under a fragile ceasefire agreement.
Kepler data revealed that the Middle East exported about 48% of Asia's total LPG imports last year at an average rate of 1.54 million barrels per day, while the U.S. sent approximately 39% or 1.26 million barrels per day.
Decline in Demand Analysts stated that the insufficient supply of LPG led to a decrease in demand in March. India and China are the largest importers of LPG from the Middle East.
Middle East Exported 48% of Asia's LPG Imports in 2025 Analysts and traders reported that Asia's largest LPG importers, including India and China, are working to offset disrupted Middle Eastern supplies with shipments from the Americas, pushing spot price premiums to record highs.
LPG exports from the Middle East, Asia's largest supplier of fuel for cooking and raw materials for petrochemical plants, have decreased since the outbreak of the U.S.-Israeli war with Iran in late February last year. Analysts and traders noted that the supply shock is pressuring the profit margins of Asian petrochemical producers, forcing them to cut production and increasing costs for millions of Asian households.
The price of propane for April increased by $205 per ton to reach $750, while the price of butan rose by $260 per ton to $800.
Increase in Tariffs Preliminary data from Kepler showed that this increase in U.S. exports to Asia led to higher tariffs at U.S. Gulf Coast plants for shipping propane and butan to a record level of $273.525 and $240.09 per ton, respectively, on March 19.
