The US LPG prices have continued to surge in February 2025 amid tightened supply and amplified demand. The severe arctic weather has gripped the US central and eastern regions which increased the propane demand for heating and residential purposes. Moreover, the increase in export levels of propane has further showcased increased LPG consumption during February 2025.

Key takeaways:

• LPG prices in the USA have surged during February 2025 due to severe cold weather.
• EIA mentioned export of propane has surged, reaching a record-time high of 1.9 million bpd.
• The surge in LNG export showcased an increase in natural gas demand.
• Production costs of LPG have increased during February 2025 due to less obtainability of natural gas.
• Saudi Aramco to decline propane and butane prices in March 2025.

As per ChemAnalyst, the LPG prices are expected to decline in March 2025 on the back of low demand. As the winter season will subsidize, the demand for downstream heating and blending fuels is expected to decline. Moreover, Saudi Aramco is expected to lower propane and butane prices which could further influence the LPG market dynamics.

Previously, US LPG export terminal capacity has been a bottleneck for export growth between US-Asia arbitrage, however, expansions are expected to increase export capacity in the second half of 2025. Moreover, midstream operators including Energy Transfer, Targa, and Enterprise have been investing in refrigeration and pipelines to cope with the pace of production.

As per the recent assessment, Saudi Aramco's decision to elevate its propane and butane prices, driven by escalating demand at export terminals, has surged the LPG prices in the USA.

Furthermore, the surge in demand for LNG exports had a substantial impact on LPG production. The increase in feedstock natural gas, the primary input for both LNG and LPG, led to a rise in natural gas prices which effectively elevated production costs for LPG, and thus creating a ripple effect throughout the market.

The situation was further heightened by the robust performance of LPG exports, which reached record levels. As per the EIA data the US Propane exports increased from 1659 thousand barrels per day to 2248 thousand barrels per day in February 2025.

Moreover, propane inventories were significantly depleted, further aggravating the supply-demand imbalance. The data released by the Energy Information Administration (EIA) showcased tightening supply situation. During the final week of February, propane inventories fell by 2.9 million barrels, falling 4% below the five-year average for this time of year.