The northwest European large cargo propane price is heading for a weekly gain of more than $160/t, the biggest on record, after hitting a three-year high on Thursday.
The Amsterdam–Rotterdam–Antwerp (ARA) large cargo propane assessment climbed to $718.50/t on 5 March, the highest since January 2023. That extended a rally that began with the war between the US, Israel and Iran, which has effectively shut the strait of Hormuz.
Around 30pc of global seaborne LPG exports pass through the strait of Hormuz, meaning a prolonged disruption would tighten global balances and heighten competition for alternative cargoes, particularly from the US.
Prices jumped $87/t on Monday and by nearly $64/t on Tuesday. The pace of increases has eased, but upward momentum appears likely to continue. Previously, the largest weekly increase at the end of February 2022, of $121/t, just days after Russia's full–scale invasion of Ukraine. Resulting supply tightness then pushed regional prices to nearly $1,000/t, settling at $995.25/t.
European cif ARA propane paper for March was trading at $680–690/t on Friday morning, around $15–20/t above Thursday's $665/t settlement. The equivalent AFEI paper was up by about $15/t at $750/t.
Strength in the paper market reflects tightening global fundamentals and renewed buying interest in the large cargo physical market. Two buyers reappeared on Thursday seeking spot propane, having made several attempts earlier in the week, all unsuccessful. This repeat presence suggests buying interest is likely to persist, which could push the physical premium above already-elevated propane swaps.
The sharp rise in European paper and physical prices has already far exceeded the response to Middle Eastern hostilities during a 12-day escalation in June 2025, when European propane gained only $40–50/t.
This year's effect has been amplified by pre-existing supply constraints. Saudi state-controlled Aramco had already declared force majeure on LPG loadings from its Juaymah NGL facilities, which supply the Ras Tanura export terminal. Supply constraints are emerging elsewhere. US propane inventories rose by 819,000 bl in the latest reporting week, pushing stocks to 54pc above the five-year average for the time of year. Earlier weather-related disruptions to US export operations have contributed to congestion at key terminals, limiting available loading slots and slowing the movement of cargoes into the international market.
