VLGCs could turn to USGC as LPG supply tightens in International Shipping News 04/03/2026 Following recent tensions in the Middle East Gulf, Far East propane and butane swaps jumped to their highest levels since February 2023 on impending supply tightness. Already, suspension at Juaymah Terminal at Saudi Arabia’s Ras Tanura had given an early signal of future supply tightness, which was reflected in the spot market late last week. But over the weekend as conflict in the Middle East intensified, it prompted AFEI propane swaps to rise to $751/t at Asia close on March 2nd – a 21% Friday-to-Monday rise, while m1-m2 swaps widened to $75/t. Only two laden VLGCs passed through the Strait of Hormuz since the escalation start on February 28 to date. If the disruption persists, a total of 1.2mbd of MEG LPG exports could be eventually affected. MEG (excluding Iran) is India’s largest supplier of LPG, covering 92% (~720kbd) of the country’s imports as of 2025. Unlike two other main buyers of MEG LPG, Northeast and Southeast Asia, India’s LPG demand is primarily driven by residential usage. India’s domestic production covers 40% of the overall supply needs (~1.2mt), underlining the significance of seaborne supply for its domestic market (PPAC). Should MEG supply disruptions materialise on a more significant scale, India would likely be the first destination seeking prompt replacement barrels. Such replacement could likely come from the United States, particularly USGC, where LPG exports reached a dataset high this January at 2.34mb. PADD 3 propane stocks also continue to sustain seasonal highs this year, tracing ~20mb above last year’s levels as of late February (EIA). Meanwhile, at least three VLGCs have signalled redeployment from MEG to the US, which could be an early indication of flows realignment. Should the Strait of Hormuz closure force vessels away from the region, we could see more ballast VLGCs divert toward USGC for prompt ample supply. However, Indian buyers would likely have to offer premium terms to secure cargoes from USGC to compete with other Asian buyers – including NE petchems or other residential markets like Indonesia. Source: Vortexa 2026-03-04 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share