Petroleum products

Propane inventories
U.S. propane inventories reached a record-high 104 million barrels in October 2025, and we expect propane inventories will remain above the five-year range for nearly all of 2026 and 2027. Reflecting seasonal demand, U.S. propane inventories typically increase from April through September and decrease from October through March.

Propane inventories in our forecast peak in October 2026 at nearly 112 million barrels, 19 million barrels above the five-year average, before starting to draw down for the winter heating season. By the end of the winter, we forecast that inventories decrease to 67 million barrels in March 2027, or 21 million barrels above the five-year average. We forecast that inventories will build at a slower rate in 2027, ending October 2027 at 107 million barrels, about 15 million barrels above the five-year average.

Propane inventories reflect supply and demand balances. U.S. propane demand is greatest in the winter months because propane is used as the main heating fuel in about 5% of U.S. homes, primarily in the northern parts of the Midwest and Northeast. Most propane is produced at gas plants, and propane production has risen in recent years as natural gas production has grown. U.S. propane production grew by 5%—125,000 barrels per day (b/d)—from 2024 to 2025, leading to high inventories going into 2026. We forecast propane production to increase by 4% in 2026 and 6% in 2027, which supports elevated inventories throughout the forecast period.

With growing propane production, the United States is well positioned to make up for some of the lost supply from the Persian Gulf after the Strait of Hormuz closure. Almost half of Asia’s propane imports in 2025 came from countries in the Persian Gulf, according to Vortexa. The U.S. Gulf Coast (USGC) provides most of the Asia’s remaining imports, with marginal imports from Canada and West Africa. High U.S. propane inventories put downward pressure on USGC prices. According to data from Argus, the average price spread between propane on the USGC and East Asia propane reached 97 cents per gallon (gal) in March 2026, compared with March 2025 when it was 29 cents/gal. This price spread was the widest since December 2012.

Lower propane prices on the USCG compared with East Asia create a strong pull for U.S. propane exports. We forecast U.S. net propane exports will increase 7% in 2026 and 10% in 2027. Two USGC projects coming online this year and next year will add a combined 660,000 b/d of liquified petroleum gas (LPG) export capacity: the Enterprise Port Neches LPG terminal that began service in April; and Enterprise’s expansion at its Houston Ship Channel location. A planned expansion at Targa’s Galena Park facility in 2027 would add 133,00 b/d of capacity.

However, we expect some factors will limit exports in the coming months. The Targa Galena Park facility encountered maintenance issues in early March and declared force majeure. The Targa facility accounts for about 20% of all U.S. liquified petroleum gas (LPG) exports. Vessel tracking showed that the facility was loading vessels at the time of writing, and we expect exports to increase in 2026. There is also a bottleneck at the Panama Canal from April going into May 2026 because of high demand for product from shipments the U.S. Gulf Coast to Asia. The shortest route for these shipments is through the Panama Canal. Vessels traveling to and from East Asia to the United States also have the option to go around the Cape of Good Hope, which could add up to two weeks of travel time.