Propane
OPIS / Mont Belvieu
One molecule, two lives: rural heating fuel in a Minnesota winter and cracker feedstock in a Shandong PDH plant.
Top Producers
share of 2025 production
Top Consumers
share of 2025 consumption
Main Uses
global propane (LPG) demand by end use, 2024
Top Exporters
share of 2025 seaborne LPG (propane) exports; the US is the largest single exporter, the Gulf producers the next bloc
Top Importers
share of 2025 seaborne LPG (propane) imports by destination
US exports
roughly 1.8 million b/d, the world's largest
as of 2025
US households heating with propane
roughly 6.6 million
as of 2024
Global demand share going to petrochemicals
roughly 45%
as of 2025
Benchmark price
OPIS Mont Belvieu non-TET propane, US cents per gallon
as of 2026
Futures contract size
42,000 gallons (1,000 bbl)
as of 2026
Propane is the workhorse of the NGL barrel, a three-carbon gas that liquefies under modest pressure and so travels easily in tanks, rail cars, and refrigerated ships. It leads a double life. In the consumer economy it heats roughly 6.6 million US households beyond the gas grid, dries grain after harvest, fires forklifts and barbecues, and serves as cooking fuel across the developing world under the name LPG. In the industrial economy it is a petrochemical feedstock, cracked into ethylene or, increasingly, dehydrogenated into propylene at purpose-built PDH plants. The two demand pools share one price, which is why a cold North American winter can squeeze margins at a plastics plant in China.
The US shale boom made America the world's largest LPG exporter by a wide margin. US propane exports ran at a record 1.8 million barrels per day in 2025, loading from Gulf Coast terminals operated by Enterprise, Energy Transfer, and Targa and sailing mainly to Asia on very large gas carriers. Japan, China, South Korea, and India anchor the demand side, with Chinese PDH plants the marginal buyer. The Panama Canal is the swing variable in the freight equation: the 2023 to 2024 drought cut transit slots, sent VLGCs around the Cape of Good Hope, and at the peak pushed auction fees for a single transit above 3 million dollars.
Pricing radiates outward from Mont Belvieu. OPIS assesses the Texas spot price daily, NYMEX lists liquid cash-settled futures against it, and international markets price off Saudi Aramco's monthly Contract Price and the Argus Far East Index, with the Mont Belvieu-to-FEI arbitrage plus freight deciding how many US cargoes sail east in any given month.
How It Trades
| Venue | NYMEX (CME Group) futures and options, deep OTC swap market, physical hubs at Mont Belvieu and Conway, Kansas |
| Benchmark contract | NYMEX Mont Belvieu LDH Propane (OPIS) futures, cash-settled against the OPIS Mont Belvieu non-TET propane monthly average |
| Contract size | 42,000 gallons (1,000 barrels) per contract |
| Price terms | US cents per gallon at Mont Belvieu; USD per tonne for Saudi CP and Far East cargoes |
| Settlement | Financial against OPIS; physical term and spot business settles separately at the hubs and export docks |
| Typical curve | Seasonal saw-tooth: winter months at a premium to summer, with inventory builds priced through the injection season |
| Liquidity | The most liquid contract in the petrochemical group; tens of thousands of contracts of open interest and a workable curve three or more years out |
Where It Trades
approximate split of futures and OTC volume, 2025; international LPG trades OTC off Saudi CP and Argus FEI while NYMEX Mont Belvieu anchors the US financial market
Supply and Demand
Top producers
- United States (gas processing plus refinery output; exported from the Gulf Coast)
- Middle East (Saudi Arabia, UAE, Qatar, Iran)
- Canada, China, Russia
Roughly 85 percent of US propane comes from gas processing rather than refineries, so supply tracks gas drilling, not refinery runs.
Top consumers
- United States (heating, agriculture, petrochemicals)
- China (PDH plants and residential LPG)
- Japan, South Korea, India, Mexico
Major uses
- Petrochemical feedstock (cracking and PDH): roughly 45 percent of global demand
- Residential and commercial heating and cooking: roughly 35 percent
- Agriculture (crop drying), autogas, and industrial fuel: roughly 20 percent
What Moves the Price
- Winter heating demand in North America and Northeast Asia
- US Gulf Coast export terminal capacity and dock space
- Panama Canal transit availability and VLGC freight rates
- Chinese PDH operating rates and margins
- Mont Belvieu versus Far East Index arbitrage net of freight
- US gas drilling and processing volumes, which set supply
- Crop-drying demand in a wet US harvest season
- Crude oil price, which anchors the value of competing naphtha feedstock
Moments That Made the Market
2008
Propane follows crude through the spike and collapse; petrochemical demand contracts in the financial crisis
2013
The US becomes the world's largest LPG exporter as Gulf Coast terminal expansions open
2014
The January polar vortex and a huge wet corn harvest drain mid-continent inventories; Conway propane briefly spikes above 4 dollars per gallon
2016
The expanded Panama Canal opens in June, cutting the VLGC voyage from Houston to Japan by roughly two weeks
2021
Winter Storm Uri freezes wellheads and fractionators in February; global propane trade reroutes around the US outage
2023
Panama Canal drought slashes transits; VLGC spot freight sets records and some transit auction slots clear above 3 million dollars
2025
US propane exports average a record 1.8 million barrels per day, with Chinese PDH plants the largest incremental buyer despite tariff frictions
What Changed Since the 2010 Handbook Era
- The US went from net LPG importer in the late 2000s to the largest exporter in history; Mont Belvieu now sets the global marginal price
- Chinese PDH plants, a technology with almost no installed base in 2010, became the single largest source of incremental propane demand
- NYMEX propane futures matured from a thin swaps proxy into a genuinely liquid contract with a multi-year curve
- Freight became a first-order price driver: Panama Canal slots and VLGC availability now move the arbitrage as much as the commodity does
- Saudi CP lost its role as the sole international reference; the market now triangulates Mont Belvieu, CP, and the Far East Index