Butane Prices Surge to Multi-Decade Highs Amid US-Iran Conflict and Shifting Global LPG Flows

Butane prices have reached levels not seen in decades across major markets, driven by a confluence of geopolitical disruptions and demand shifts. Northwest European November butane prices hit $1,125 per tonne in early November 2026—the highest in 30 years—while Asia's AFEI butane index stood at $1,180/t on November 3 and US Belvieu prices climbed to a 14-year high of $920/t.[1][2]

The primary catalyst is the reorientation of global LPG trade following the onset of the US-Iran conflict in March 2026. Prior to the crisis, the US accounted for 45-50% of global LPG exports and the Middle East 30-35%. Gulf exports subsequently collapsed to around 11%, with the US share rising to 65% as it filled the gap, redirecting substantial volumes to Asia.[3][4] US cargoes supplied up to 75% of Asian imports from April to October before easing to ~55% amid partial Gulf recovery. This has starved Europe, with ARA butane imports falling 34% year-on-year to a multi-year low of 130,000 tonnes in October.

Compounding factors include compositional mismatches—US exports are ~75% propane versus the 50:50 blend favored in parts of Asia for cooking gas—and surging Asian demand. China's new MTBE plants (3.4 million t/year capacity added in 2025) boost butane feedstock needs for gasoline additives, with exports sustaining purchases. Seasonal winter gasoline blending demand in the Atlantic basin adds further pressure.

India has been hit hardest, with LPG imports dropping over 40% initially as Gulf supplies (previously ~87% of its imports) were disrupted. Partial recovery and US volumes have eased refinery constraints but left markets tight. Broader context includes Saudi Aramco's Juaymah terminal outage and Hormuz-related shipping issues limiting regional flows.[5][6]

These dynamics echo earlier spikes post-Russia's Ukraine invasion but exceed them in butane specifically due to the butane-heavy shortfall from the Gulf.