Record US LPG flows signal elevated freight rates through mid-2026

The Middle East Gulf conflict has triggered unprecedented shifts in the global Very Large Gas Carrier (VLGC) fleet, sending a record 150 vessels towards the US Gulf Coast by mid-March. 

This massive repositioning, however, has recently unwound as US LPG exports hit an all-time high of 2.8 million barrels per day in April, Vortexa said in a report. 

Despite the sharp fluctuations in vessel availability, the key BLPG3 (USGC-to-Chiba) freight rates continue to climb, leading market observers to question the ceiling for this upward trajectory.

Record US exports boosted by Middle East supply constraint

US LPG exports to Asia hit a record high of 1.7 million barrels per day (mbd) in April, marking a 21% month-over-month increase, according to data from Vortexa. 

As previously noted, the ongoing constraint in Middle East Gulf (MEG) volumes has structurally boosted the US market share across Asia, a trend that is expected to continue into June, the ship-tracking agency said.

US LPG exports to Northeast Asia (NEA) hit a seasonal peak in April, rising 23% month-over-month to 1.1 million barrels per day, the data showed. 

Panama congestion

Growing congestion at the Panama Canal prompted a notable shift in shipping routes, with nearly 10% of US LPG cargoes destined for NEA sailing around the Cape of Good Hope, Anna Zhminko, associate market analyst at Vortexa, said in the report. 

This congestion for Very Large Gas Carriers (VLGCs) was exacerbated in April by an increasing number of laden oil tankers accumulating north of the canal.

In April, 40% of US LPG carriers bound for Asia rerouted via the Cape of Good Hope.

This shift coincided with a sharp increase in auction costs for Neopanamax lock transits, which reached $1.076 million on April 29—nearly a fourfold rise since the start of the conflict in the Middle East Gulf, according to Argus.

BLPG3 (USGC-Chiba) freight rates have reached late-2023 levels, climbing to a peak of $244.8 per ton on April 29, a rate last seen during the Panama Canal draught-period.

“Given demand for US LPG cargoes is firm, global buyers relying heavily on US volumes, congestion at the Panama Canal showing no ease, and some US-origin voyage times extend by 20+ days (due to Cape of Good Hope) freight rates will likely remain elevated,” Zhminko said. 

Outlook for US LPG

The number of mainstream very large gas carriers ballasting in the Atlantic Basin has increased, with 13% of the fleet currently having sailed or being in transit from the Pacific Basin to the US Gulf Coast, Vortexa data showed. 

This represents a 3 percentage point rise compared to the daily average in January 2026, which was a previous high for US LPG exports, Zhminko said.

LPG exports from the Middle East (excluding Iran) remain low, averaging around 215,000 barrels per day in April, the data showed.

This sustained low volume has driven the ratio of laden to ballast vessels in the region to historically low levels.