Renewed fighting between US and Iran has slowed shipping through the Gulf of Hormuz, disrupting supply routes. Benchmark crude prices have climbed sharply from pre-conflict levels, reflecting heightened geopolitical risk. The upward price pressure is likely to continue while tensions persist.
LPG Price Trend Analysis 2026: Historical Prices, Market Insights, Price Drivers, Supply Demand Analysis & Latest News
Written ByShriya Singh
LPG Price Trend Q2 2026
| Product | Region | Incoterm Basis | Price | Last Updated Month |
|---|---|---|---|---|
| LPG | USA | FOB | USD 573.00/MT | May 2026 |
| LPG | Saudi Arabia | FOB | USD 850.00/MT | May 2026 |
| LPG | Germany | CIF | USD 592.00/MT | May 2026 |
| LPG | China | FOB | USD 997.25/MT | May 2026 |
| LPG | Canada | CIF | USD 304.79/MT | May 2026 |
| LPG | USA | FOB | USD 423.43/MT | April 2026 |
| LPG | Saudi Arabia | FOB | USD 750.00/MT | April 2026 |
| LPG | Germany | CIF | USD 628.00/MT | April 2026 |
| LPG | China | FOB | USD 923.50/MT | April 2026 |
| LPG | Canada | CIF | USD 450.00/MT | April 2026 |
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- LPG prices moved mixed in Q2’26, with Asia firmer on import disruption, while Europe softened as demand and crude-linked costs weakened.
- Feedstock pressure came from constrained Middle Eastern LPG availability, longer replacement-cargo routes, and rising U.S. supply support through propane production growth.
- Downstream demand stayed weak in petrochemicals, household cooking gas, city-gas feedstock, and industrial consumption, limiting stronger price momentum.
Asia
In China, the prices of LPG were ~RMB 6.31/kg in April and ~RMB 6.75/kg in the subsequent month. The LPG price curve witnessed a ~7.0% increase in the first two months of Q2’26. The rise was mainly driven by tighter Middle Eastern cargo availability and higher delivered import costs into Asia. Replacement supply from the United States helped reduce shortage risk but longer voyages and constrained export logistics kept landed costs elevated. However, the price increase was capped by weak petrochemical demand, as propane dehydrogenation and steam-cracker users reduced operating rates due to poor margins and feedstock shortages. Indian household and industrial demand also weakened as high import costs affected affordability and availability.
Europe
In Germany, the prices of LPG were ~EUR 0.54/kg in April and ~EUR 0.51/kg in the following month, showing a ~5.2% decrease. European LPG prices softened because local demand was weaker than Asian import-driven pricing pressure. Lower crude-linked sentiment, softer industrial usage, and limited heating demand reduced buying urgency. Europe did not face the same direct Gulf replacement pressure as Asia, so weaker downstream offtake had a clearer impact on prices. Autogas, petrochemical, and commercial demand remained cautious, limiting any pass-through from global supply disruption.
North America
North America remained the main balancing supplier for the global LPG market. EIA reported that U.S. propane production increased by 125,000 barrels per day, or 5%, during 2025, and expected another 4% increase in 2026. EIA also forecast inventories to reach nearly 112 million barrels in October 2026, supporting export availability. Two U.S. Gulf Coast projects were expected to add a combined 660,000 barrels per day of LPG export capacity, improving medium-term supply flexibility.
Analyst Insight
According to Procurement Resource, in the near term, LPG prices may stay sensitive to Middle Eastern shipping flows and Asian import demand. Rising U.S. supply and weak petrochemical demand may cap further gains.
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Intensified US-Iran military actions disrupt oil shipments through the Strait of Hormuz, causing a sharp spike in crude oil prices. The price jump leads to severe depreciation of the Indian rupee, raising import costs and inflationary concerns.
The IEA expects world oil demand to decline year-on-year for the first time since 2020, driven by the Iran war and Strait of Hormuz closure. Prices have eased on prospects of a surplus late in 2026, but renewed hostilities threaten supplies and introduce volatility.
U.S. and Iran reach agreement to reopen the Strait of Hormuz, ending the biggest oil supply shock in history. Crude oil futures dropped nearly 5% on the news, with U.S. crude settling at $80.75 and Brent at $83.17. Uncertainty over the timing and demining efforts may temper further price declines.
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- LPG prices showed a strong upward trend globally in Q1’26, supported by supply disruptions linked to the Iran war and tightening trade flows through the Strait of Hormuz.
- Supply conditions tightened significantly as disruptions to Middle East exports and shipping routes increased costs and reduced availability, which led to price increases.
- Downstream demand remained firm from household consumption and commercial use, while supply prioritization and import dependence supported higher prices.
Asia
In Asia, LPG prices increased sharply due to supply disruptions and strong import dependence. In China, prices were about ~RMB 2.22/kg (Spot FD) in January and around ~RMB 2.63/kg in March, rising by about 18.46%. The increase was driven by reduced inflows from the Middle East following the Iran war and disruption in the Strait of Hormuz, which handles a significant share of global LPG trade, leading to tighter availability and higher costs. In India, LPG prices also increased due to supply-side constraints, with commercial cylinder prices rising following global benchmarks. India consumed about 33.15 million metric tons of LPG annually, with around 60% met through imports and nearly 90% sourced from the Middle East, making it highly exposed to disruptions. India resorted to diversifying its LPG imports toward the US, Norway, Canada, and Russia as Gulf supply routes tighten, while invoking emergency measures to protect household cooking gas supply.
Europe
In Europe, LPG prices increased as reduced Middle Eastern supply and competition from Asia tightened availability. European propane prices surged by around 22% between Friday’s close and Monday morning, in the first week of March, amid escalating Middle East tensions and potential supply disruptions, with gains outpacing crude. Market fears over Strait of Hormuz closures and reduced US LPG flows to Europe further intensified volatility, though demand adjustments in Asia may temper the rally.
North America
In North America, LPG prices remained firm, supported by export demand and global supply disruptions. The region benefited from its strong production base, supplying cargoes to deficit regions such as Asia and Europe. However, rising logistics costs and strong global demand linked to the Iran war and Strait of Hormuz disruptions supported prices despite a relatively balanced domestic supply.
About LPG
Liquefied petroleum gas or better known as LPG is a mixture of hydrocarbon gases. It is flammable in nature. LPG is most widely used for household purposes, for example in cooking, or as a fuel for heating. It is replacing CFCs or chlorofluorocarbons rapidly, as it is less harmful for environment and has a lower impact on ozone layer when compared to CFCs. Its primary constituents are propane and butane, while natural gas contains lighter methane and ethane. Commercially, the product is mainly derived from fossil fuels.
LPG Product Detail
Industrial Uses
Cooking, Rural heating, Internal combustion engines and motor fuel, Aerosol propellants and refrigerants, Gasoline, Farming, Power generation
Synonyms
Liquefied petroleum gas, Liquid petroleum gas (LP gas)
Supplier Database
Gazprom PAO, Royal Dutch Shell Plc, Exxon Mobil Corporation, Total SA, BP Plc
Regional Coverage
Asia Pacific
China, India, Indonesia, Pakistan, Bangladesh, Japan, Philippines, Vietnam, Iran, Thailand, South Korea, Iraq, Saudi Arabia, Malaysia, Nepal, Taiwan, Sri Lanka, UAE, Israel, Hongkong, Singapore, Oman, Kuwait, Qatar, Australia, and New Zealand
Europe
Germany, France, United Kingdom, Italy,Spain, Russia, Turkey, Netherlands, Poland, Sweden, Belgium, Austria, Ireland Switzerland, Norway, Denmark, Romania, Finland, Czech Republic, Portugal and Greece
North America
United States and Canada
Latin America
Brazil, Mexico, Argentina, Columbia, Chile, Ecuador, and Peru
Africa
South Africa, Nigeria, Egypt, Algeria, Morocco
CurrencyUS$ (Data can also be provided in local currency)
Supplier Database AvailabilityYes
Customization ScopeThe report can be customized as per the requirements of the customer
Post-Sale Analyst Support360-degree analyst support after report delivery
Note: Our supplier search experts can assist your procurement teams in compiling and validating a list of suppliers indicating they have products, services, and capabilities that meet your company's needs. Procurement Resource tracks LPG prices for more than 150 countries across the globe.
LPG Production Processes
- Production of LPG from Petroleum (Crude Oil) via Refining; or via Processing of Natural Gas
LPG can be obtained from natural gas via its processing. LPG is most widely recovered during the extraction of natural gas, which is found beneath the earth's surface.
Frequently Asked Questions
During Q1 2026, LPG prices in China increased sharply by 34.3% from January to March. The rise was driven by stronger propane and butane demand, firmer crude-linked pricing, and tighter spot availability. China’s LPG market was especially sensitive to petrochemical demand from propane dehydrogenation units, seasonal restocking, and import-cost pressure.
Quarter-on-quarter, LPG prices in China increased by 11.7% during Q1 2026. This showed that the average Q1 price level was stronger than Q4 2025, supported by higher feedstock-linked costs, stronger petrochemical buying, and tighter supply sentiment. The Q-o-Q rise also reflected China’s continued reliance on imported LPG for propane and butane demand.
The main factors affecting LPG prices in Q1 2026 were stronger petrochemical demand, rising import costs, and concerns over Middle East supply security. China's propane dehydrogenation (PDH) sector maintained active procurement, supporting propane consumption. At the same time, geopolitical tensions and disruptions to regional shipping routes increased freight costs and supply-risk premiums, while higher crude-linked contract prices raised replacement costs for importers. These factors supported stronger LPG prices throughout the quarter.
Major LPG markets include China, the United States, India, Japan, South Korea, Saudi Arabia, the United Arab Emirates, Qatar, Indonesia, and Brazil. The United States and the Middle East remain major export regions, while Asia is the key demand center. Key companies include Saudi Aramco, ADNOC, QatarEnergy, Shell, BP, ExxonMobil, Chevron, Sinopec, PetroChina, Indian Oil, TotalEnergies, and UGI Corporation.
A major recent infrastructure development was AD Ports Group’s February 2026 groundbreaking of a strategic LPG storage terminal at Khalifa Port in the UAE. The project is designed as the UAE’s first private LPG terminal hub, with refrigerated storage and marine handling infrastructure for propane, butane, and LPG mix products. It is expected to strengthen regional LPG storage, import, and re-export flexibility.
LPG is mainly produced from natural gas processing and crude oil refining. It consists primarily of propane and butane, with smaller volumes of related light hydrocarbons. The value chain includes gas extraction, refinery production, fractionation, storage, refrigeration or pressurization, marine transport, terminal handling, cylinder filling, bulk distribution, and final use in households, petrochemicals, commercial heating, agriculture, transport, and industry.
Major LPG grades include commercial propane, commercial butane, propane-butane mix, autogas-grade LPG, domestic cylinder-grade LPG, and petrochemical-grade LPG. Specifications vary by propane content, butane content, vapor pressure, sulfur level, moisture, odorant, olefin content, and residue limits. Petrochemical users often require tighter quality control, while household and autogas applications prioritize safety, vapor pressure, and combustion quality.
LPG demand is mainly driven by household cooking, residential heating, petrochemicals, propane dehydrogenation, commercial kitchens, agriculture, autogas, industrial boilers, metal cutting, ceramics, and aerosol propellants. In China, petrochemical demand is especially important because propane is used as feedstock for PDH units that produce propylene. Household and commercial consumption also supports stable baseline demand.
A significant policy-related development affecting LPG markets in 2026 was the easing of U.S.-China trade tensions through a temporary tariff truce framework that improved confidence in bilateral energy trade. Although certain Chinese tariffs on U.S. LPG remained in place, market participants anticipated more stable trade flows and improved access to U.S. propane supplies. The development influenced procurement strategies, cargo sourcing decisions, and expectations for LPG supply security across major Asian importing markets, particularly China.
Procurement Resource employs a structured methodology combining primary research, secondary market data, analytical models, and validation processes to assess LPG prices and trends. Price evaluations incorporate supply-demand dynamics, feedstock movements, trade flows, and value chain analysis, supported by continuous market monitoring to ensure accurate and reliable insights.
About the Author
Shriya Singh
Business Insights Analyst
Helping procurement and sourcing teams navigate complex markets through data-driven research, category intelligence, and actionable insights - with a focus on identifying market trends, analyzing supply-side developments, and delivering clear intelligence that supports informed business decisions.
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Other Related Reports
LPG Production from Crude Oil
This report provides the cost structure of LPG production by the petroleum refining process. In this process, the crude oil recovered is separated into oil and wet gas via a gas trap.
LPG Production from Natural gas
This report provides the cost structure of LPG production by natural gas processing. In this method, the crude oil recovered from the oil wells is sent to the gas trap where it is separated into wet gas and oil.
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