Propane Prices Surge 12% as Record Exports Drain Domestic Supply

Spot at $0.89/gal (+12%) on record exports. Stocks below average. Fall pricing moving up — lock volumes now.

The Situation

Mont Belvieu spot prices jumped 12% to $0.89/gal this week. Record 1.8 million barrels per day (bbl/day) of LPG exports to Asia are draining domestic supply. Retailers on spot are feeling immediate pain, and fall fill programs priced just two weeks ago are already underwater.

The Facts

Speed Shock for Traders

Mont Belvieu closed at $0.891/gal, up from $0.791 in just seven trading days. This marks the largest weekly move since February 2024. LPG exports hit an unprecedented 1.8 million bbl/day, shattering the previous record of 1.65 million bbl/day set in March 2025.

Inventory Trajectory Worries

The EIA reports 58.2 million barrels in stock — 8% below the five-year average. Inventory builds are running 15-20% below the seasonal pace for four straight weeks. Midwest rack premiums have widened to $0.06–$0.09/gal, while the Northeast sees $0.10–$0.14/gal delivered.

Business Impact

A 500,000-gallon annual retailer paying $0.89/gal versus $0.79/gal faces an additional $50,000 in costs. Wholesalers who priced fall pre-buy at sub-$0.80 are now looking at $0.04–$0.07/gal margin compression. Export demand is a structural shift, not a temporary blip — don’t expect a quick reversal.

Key Data Points

Spot: $0.891/gal (+12.7% Week-over-Week)
Exports: 1.8M bbl/day (record high)
Terminal utilization: 94%
Stocks: 58.2M bbl (−8% vs. 5-year average)
Midwest rack premiums: $0.06–$0.09/gal

Key Takeaways

Export demand at 1.8 million bbl/day is structural, not temporary.
Lock fall/winter contracts this week to mitigate further price increases.
Midwest rack premiums are the widest they’ve been since the 2023-24 polar vortex.
Communicate current market conditions proactively and transparently to your top customers.

Action Steps

Review your contract coverage through March 2027 immediately.
Lock in additional fall volumes at current posted prices.
Run a detailed margin analysis on your top 50 accounts.
Draft and prepare customer communication regarding current market conditions and pricing strategies.

Competitive Advantage

Retailers who proactively locked in summer supply can now offer more aggressive fall pricing that competitors on spot cannot match. Transparent customer communication during periods of volatility builds loyalty that will outlast any price spike.