Global and domestic supply-demand dynamics of LPG (liquefied petroleum gas)

3. Current status of LPG trade In 2019, global LPG trade volume exceeded 104 million metric tons, of which approximately 40 million tons originated from the Middle East. Due to slowing growth in Middle Eastern production, overall export growth has been sluggish. In contrast, U.S. LPG production surged rapidly, driving a sharp rise in U.S. LPG exports—making the United States the world’s largest LPG exporter. The top five exporting countries were the United States, Qatar, the United Arab Emirates (UAE), Saudi Arabia, and Russia; the top ten exporters accounted for 96% of total global exports. Asia remains a net importing region: the top five importers were China, Japan, India, South Korea, and Indonesia; the top ten importers collectively accounted for 70% of total global imports. In 2019, the United States exported 40.53 million tons of LPG, primarily to South America, Europe, and the Far East. The Middle East exported 39.6 million tons, including 8 million tons from Saudi Arabia, 10 million tons from the UAE, 4.6 million tons from Kuwait, 12 million tons from Qatar, and 5 million tons from Iran. The Commonwealth of Independent States (CIS) exported 8.8 million tons, mainly to Europe and the Far East. Africa exported 7.5 million tons, with Algeria alone accounting for 6.4 million tons. Australia exported 2.85 million tons. On the import side, the Far East (China, Japan, South Korea, and Taiwan) imported a total of 39.27 million tons: China imported 19.67 million tons; Japan, 10.5 million tons; South Korea, 7.4 million tons; and Taiwan, 1.7 million tons. Europe imported 18.4 million tons. South and Southeast Asia imported 25.39 million tons in total—including 14.5 million tons by India, 5.7 million tons by Indonesia, 1.1 million tons by Vietnam, and 0.9 million tons jointly by Thailand and the Philippines. South America imported 11.59 million tons. 4. LPG pricing systems Globally, LPG pricing is governed primarily by three benchmark systems: MB (Mont Belvieu), CP (Contract Price), and FEI (Far East Index). The MB benchmark applies mainly in North America and reflects the FOB (free-on-board) price at Mont Belvieu, Texas—a major U.S. LPG hub. Daily MB prices are published by OPIS (Oil Price Information Service) and reflect local U.S. LPG market conditions. Because Mont Belvieu lies in southern Texas, calculating the FOB price requires adding transportation and loading costs—including pipeline fees and terminal handling charges—which constitute a relatively large and sometimes volatile portion of the unit LPG price. The CP price—the official monthly LPG price announced by Saudi Aramco at month-end—is also an FOB price. Prior to publication, Saudi Aramco consults recommendations from select market buyers and considers corresponding paper-gas (futures) prices and crude oil trends. Wanhua Chemical is among the few Chinese companies granted CP recommendation rights. Currently, over 90% of Saudi LPG is sold under long-term contracts priced using the formula “CP + premium/discount”; other Middle Eastern producers likewise reference CP when pricing their cargoes. Since a large share of China’s LPG imports originates from the Middle East, the CP price plays a pivotal role in determining the landed cost of imported LPG in China. The FEI series—jointly published by Argus and S&P Global Platts on a daily basis—includes CFR (cost-and-freight) benchmarks such as CFR Japan, CFR Far East, and CFR ARA. It serves as the dominant pricing reference in Japan and South Korea. FEI values are calculated by Argus based on the average landed cost of LPG deliveries expected within the next 25–40 days. Its associated swap contract is the world’s most actively traded LPG swap, with roughly 40 million tons of physical LPG annually priced against the FEI index.

33 billion USD in global losses caused by the six-month U.S.–Israel–Iran conflict, illustrated across ten charts

Egypt paid $5.2 billion—equivalent to 1.33% of its GDP—nearly equal to the country’s total income over five days. Among the twenty countries and regions analyzed, the relative economic burden varied up to fifteen-fold: from Egypt’s 1.33% down to Germany’s 0.09%. South Africa, Chile, Thailand, Vietnam, and the Philippines each spent more than 0.65% of GDP, while the UK spent 0.14% and Turkey 0.19%. This GDP-share metric measures countries’ capacity to absorb energy-price increases arising from the conflict—not actual GDP reduction. The heaviest burdens fell on those least able to bear them. Typical low- and lower-middle-income importing countries contributed around 1.0% of GDP, whereas high-income importing countries contributed only 0.45%, meaning poorer nations bore roughly twice the relative burden. When oil-exporting countries are included, high-income nations overall performed better, contributing just 0.09% of their combined GDP—largely because nearly all major exporters belong to this group—while all other income-group countries collectively paid more than this group’s actual income. Whether measured per typical country, population-weighted, or GDP-weighted, the poorest group of countries bore a relative burden 1.7 to 2.3 times greater than that borne by the wealthiest group. Countries whose ports primarily serve landlocked neighbors were excluded from the analysis, as much of their import expenditure effectively originates from neighboring countries. Price shockwaves hit households through cooking fuel Liquefied petroleum gas (LPG) is the most direct household fuel used for cooking across much of South Asia, Southeast Asia, and Africa—especially prevalent in rural and low-income households. India is the world’s largest LPG importer. In this analysis, LPG pricing differs from other fossil fuels. Saudi Aramco publishes monthly propane and butane prices at the beginning of each month; futures contracts for Gulf cargoes delivered to Asia and Africa are all benchmarked to these prices—making them administratively set rather than market-determined. By contrast, Mont Belvieu in the United States functions as a market-based pricing benchmark. Actual LPG prices paid by buyers depend on cargo origin. Saudi Aramco’s contract price rose from $545 per ton in February 2026 to $750 per ton in April—a 38% increase—and peaked at $760 per ton in June before falling to $580 per ton in July. August’s contract price—estimated based on settled futures—is projected at $621 per ton. Comparing Aramco’s announcements from February to July reveals that for three-month futures contracts still trading on their announcement date, settlement prices matched the published CP exactly; for three-month contracts expiring two or three days earlier, settlement prices deviated from the published CP by no more than 1.4%. Butane—which accounts for over half of India’s LPG purchases—rose more sharply than propane. In its April pricing announcement, Saudi Aramco raised the official propane price by 38% to $750 per ton and the official butane price by 48% to $800 per ton. Within six months after U.S. airstrikes against Iran, India’s per-ton price for cooking LPG was 29% higher than market expectations, while import volumes declined by 26%.

Saudi Aramco and Sonatrach Raise LPG Prices for October

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Saudi Aramco and Sonatrach Raise LPG Prices for October

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