Asia's LPG market remains cautious despite news of a possible U.S.-Iran peace deal, with participants noting that the immediate priority is to move stranded vessels in the Middle East out rather than restoring Strait of Hormuz flows.
Many participants have adopted a wait-and-see approach, focusing on whether vessels can safely exit. For them, this is a test of whether conditions are stable enough to support a broader recovery of Hormuz LPG flows.
There were around 21 Very Large Gas Carriers transiting the Strait of Hormuz weekly pre-war, but this has dropped to two to four vessels per week following the war, according to analysts. Currently, around nine VLGCs remain stuck in the Middle East awaiting safe transit.
Indian shipbroking sources heard that Indian naval authorities have been in discussions with traders and shipowners to facilitate the safe exit of the country's vessels and ships carrying cargoes destined for India on a CFR basis.
India is the Asian market most affected by the war, given its traditional reliance on Middle East cargoes for supply. With ongoing supply tightness, sources said Indian importers are now prioritizing the movement of existing cargoes already secured across the Strait of Hormuz.
"Trade flows won't be restored that quickly. There is still a lot of uncertainty regarding physical vessel safety and insurance. Shipowners are unlikely to be willing to re-enter the region quickly with conditions not fully stabilized yet," a trader said.
Other sources noted that with Middle East supply disruptions already forcing importers to diversify sourcing, buyers are unlikely to rush back into the region even as sentiment improves.
The U.S. is the main alternative source, with Vortexa data showing American LPG flows to Asia rising to 3.56 million metric tons in March from around 3 million mt in February following the escalation. June volumes are estimated at 4.25 million mt.
Supplies from other markets, such as Canada and Australia, have also increased. Canadian exports rose to 338,300 mt in March from 213,500 mt in February, while Australian volumes increased to 240,500 mt from 134,400 mt over the same period. Flows from both countries have remained above 200,000 mt in April and May.
The Far East propane swap for June opened at $758/mt on Monday morning, down $42/mt from last Friday. The CFR Japan propane flat price was at $893.75/mt last Friday, up 43.4% from pre-war levels, OPIS assessments show.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Cheryl Lee, clee@opisnet.com ; Editing by Mei-Hwen Wong, mwong@opisnet.com
(END) Dow Jones Newswires
May 25, 2026 03:14 ET (07:14 GMT)
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