Q1 review: War in Iran disrupts LPG, energy markets

June 1, 2026 By Brian Richesson 0 Comments

The first quarter of 2026 was marked by significant disruption across global LPG and energy markets, driven primarily by escalating geopolitical tensions in the Middle East, reports Dorian LPG Ltd., an LPG shipping company and an owner/operator of modern very large gas carriers, in its financial results for the three months and fiscal year ended March 31. The company has offices in Connecticut as well as in Denmark and Greece.

The U.S./Israel-Iran conflict effectively disrupted transit through the Strait of Hormuz for much of March, while attacks on regional infrastructure curtailed production and exports of oil, gas, LPG and petrochemical products, Dorian LPG explains. As a result of these supply disruptions, energy and LPG prices moved sharply higher during the quarter.

In contrast, U.S. Gulf LPG prices increased more moderately, particularly for propane, as higher oil and gas prices incentivized incremental U.S. production. Strong production growth, combined with elevated inventories and terminal constraints, caused propane prices as a percentage of WTI crude to decline from 43 percent at the beginning of the quarter to approximately 35 percent in March. However, butane prices strengthened amid rising demand for split cargoes destined for Asian importers seeking alternatives to Middle Eastern supply.

The shift in global trade flows significantly increased pressure on U.S. export infrastructure. Spot terminal fees at the U.S. Gulf Coast rose dramatically – from approximately 8.6 cents per gallon (cpg) during the first week of January 2026 to nearly 44 cpg by the end of the quarter. This reflected tightening terminal availability and growing export demand.

Global LPG trade patterns shifted materially during the quarter. U.S. LPG exports increased from approximately 5.5 million metric tons (MMT) in February to nearly 6.3 MMT in March, partially offsetting the decline in Middle Eastern exports, which fell from roughly 4 MMT in January to approximately 1.3 MMT in March. Major importers, particularly India and China, experienced meaningful reductions in import volumes due to the regional supply disruption. India’s LPG imports declined from approximately 2.2 MMT in January to below 0.5 MMT in March.

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