What's Behind the Massive Export Total?

In yesterday's Propane Buzz, I wrote the following as it relates to the all-time record export total that was reported by the EIA, at 2.625M/bpd: "I am skeptical of this total, as are others in the industry. You can see the top ten weekly export totals ever reported in the image above, so you can see how much of an outlier this total is. I am not even certain if there is enough export capacity in the Gulf to lead to 2.625M/bpd of exports."

The export total was nagging at me all day, so I did a little research, and this is what I came back with:

1. Enterprise's Neches River Terminal near Beaumont, Texas, is online and shipped its first cargo last month. This was a couple of months ahead of schedule and has the capacity to export an additional 360,000 bpd of propane. This capacity is not entirely online just yet and is ramping up. It doesn't have to be entirely propane; it can be up to 360,000/bpd of propane, 180,000/bpd of ethane, or a combination of the two.
2. Energy Transfer's Nederland Flex Capacity Shifted to Propane: This additional capacity, 250,000 bpd, was brought online last summer and can be used for either propane or ethane. Given the ongoing supply disruption in the Middle East and the US being the primary source of propane for many countries around the world at the moment, propane is offering profitable netbacks, and as much loading space as possible is going to propane exports.
3. Price: To that end, the average price spread between propane on the U.S. Gulf Coast and East Asia reached 97 cents per gallon in March 2026, compared with 29 cents per gallon in March 2025 — more than triple the year-ago differential. Almost half of Asia's propane imports historically came from Persian Gulf countries that are now offline, and U.S. propane inventories as of mid-April were 80 million barrels — more than 23% higher than they had ever been at that point in the year. Asian buyers had nowhere else to go, and American sellers had abundant product and a 97-cent/gallon incentive to move it. (imarcgroup.com).

So we had a confluence of being the only export show in town...er...the planet, combined with an increase in export capacity and attractive netbacks that pushed propane to the front of the line, all happening at the same time.

This also changes the max-capacity math moving forward, but I don't know that we are entering an era (just yet) where 2.65M/bpd is a new floor. It's probably still closer to a ceiling, for now, but the Neches River Terminal's capacity will keep ramping up, and so long as the producers see a better netback on propane than ethane, and so long as the VLGC's are available, propane exports could do a lot of heavy lifting for the next several weeks to months, depending on how long the war with Iran goes on.

Were it not for strong export totals, propane inventories would be climbing and pushing toward all-time highs come the fall. As it stands now, propane inventories are still at record levels for the third week of May, with 81.2M/bbls in storage compared to the previous high water mark of 78.8M/bbls back in the third week of May 2014. Back then, export capacity was nowhere near what it is now, as this was the dawn of the shale era, and a good chunk of propane production in the Marcellus region (northeast) could not reach waterborne markets because the Mariner 2 line was not yet active.

While propane production remains near all-time highs, and has averaged 2.989M/bpd since the start of April, propane export capacity has risen with it. As long as the war continues, propane exports could flirt with the higher ends of export capacity. Once the war is over and the Persian Gulf is open again for unfettered business, one would expect US propane exports to fall and domestic inventories to rise, with production not falling as demand for US-sourced propane declines.

Until then, however, expect significant week-to-week variances in propane flows out of the US. As a reminder, the closing average prices for propane on the Friday before the war began, in late February, were Conway at $.6000 and TET at $.6600. Yesterday, Conway's average was roughly $.7250, with TET at $.8275.

Propane inventories are at their highest-ever levels for this time of year, and propane production is consistently at record levels. The production aspect was expected; the war was not. Once there is a resolution to hostilities and the Straight of Hormuz is opened, and propane exports begin flowing, that will impact US propane exports...as to just how much that will eat into what we will export will depend on how much damage has been done to LPG export facilities in the Gulf, and how soon ships can make their way back.

We still have a good deal of uncertainty about what the inventory ceiling will be this fall.

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