US propane prices in Mont Belvieu, Texas, surged by more than 9.6pc Monday morning to multi-month highs as an escalation of the US-Israel conflict with Iran over the weekend squeezed regional liquefied petroleum gas (LPG) supply.
Prompt-month LST propane at Mont Belvieu opened 6.5¢/USG higher at 72.625¢/USG and traded between 71.75-72.875¢/USG thereafter, lifting the day's midpoint to its highest level since 26 September at 72.375¢/USG ($377.07/t).
EPC propane opened 7.875¢/USG higher at 69.25¢/USG and traded between 68.25-69.375¢/USG, gaining 12.2pc from the prior session and reaching its highest level since 8 December.
The expanded conflict, which has entered its third day, threatened Middle East LPG supply to the international market, potentially bolstering demand for US cargoes. The disruption to oil and gas production facilities in the region also led shipowners to avoid transit through the strait of Hormuz.
Roughly 30.5pc of world LPG exports came out of the Mideast Gulf region in 2025, at 1.48mn b/d, Kpler data show. The supply disruption led to a spike in delivered propane prices on the Argus Far East Index (AFEI) and in Europe.
Steeper gains in US propane Monday morning come alongside a rally in the wider natural gas liquids (NGLs) complex. EPC butane and natural gasoline at Mont Belvieu leapt by 9.1pc and 6.9pc as March began, respectively, lifting prices to 94.75¢/USG ($429.22/t) and 148.125¢/USG ($622/t), their highest levels since 23 June and 2 April 2025, respectively. US butane prices can be sensitive to disruptions to Middle East LPG flows, since the region exports a large amount of split propane-butane cargoes. Ethane prices at Mont Belvieu rose by 7.1pc from the prior session to 22.75¢/USG ($167.89/t) early Monday.
Prices for US propane, which is unseasonably abundant, still remain below year-ago levels, both outright and relative to the wider oil complex. Escalating tensions last week led April Nymex WTI to rise by $1.81/bl to $67.02/bl on 27 February, a level that would leave LST propane on Monday morning at 45.4pc of Nymex WTI, 9.8 percentage points lower than the start of last March, even if crude futures remain steady. LST propane sits 17.5¢/USG below its 3 March 2025 level.
