US and Middle East to compete getting share in Asia

In April 2025, there was a shocking event in the international LPG market. The US announced that it would impose a 34% of reciprocal tariff on imports from China in order to correct trade imbalance. China immediately imposed retaliatory tariffs on imports from the US. The tariffs had a great impact on LPG players including Chinese importers since half of their LPG imports was from the US.

After that, the US-China trade war heated up and both countries imposed the additional tariffs of over 100%. But the US and China agreed to suspend the start of the tariffs for 90 days at the meeting in May 2025. In October, they agreed to suspend the implementation of the tariffs for another year. The situation temporarily settled down.

But the US-China trade is not completely resolved. As of the end of 2025, the US and China are imposing tariffs on each other. China still imposes a 10% tariff on LPG from the US. The US-China trade might reignite anytime and the situation remains unstable.

Therefore, Chinese importers are avoiding importing LPG from the US. As of September 2025, the ratio of US LPG declined to around 25% of its total imports. Instead, China increased imports from Canada and Australia as well as the Middle East.

On the other hand, as China decreased imports from the US, US exporters are trying to find new customers in Asia.

LPG from Houston, Texas in the US is transported on the westbound route to the Far East including Japan and China via the Panama Canal, or on the eastbound route to Europe, South Asia and Southeast Asia via the Cape of Good Hope in Africa without passing through the Panama Canal.

With LPG exports on the westbound route via the Panama Canal decreasing, US exporters are trying to increase exports to South Asia and Southeast Asia on the eastbound route. The next target is India, which is the second-largest LPG importer after China.

Due to pressure from the US, India decided to import around 2.00mil mt of LPG from the US in fiscal year 2026.In this situation, three Indian state-run importers decided to procure US LPG from Chevron, Phillips 66 and TotalEnergies. US exporters plan to intensity LPG supply capacity from 2026 and are likely to offer to India actively.

Middel East gas producing counties are wary of the situation. LPG imports from the Middel East including the United Arab Emirates (UAE), Qatar, Saudi Arabia and Kuwait account for more than 90% of total LPG imports in India. Some Middle East gas producing countries are nervus about sales promotion to India by the US.

Saudi Aramco set the CP, contract price to term customers in Asia, at $495 for propane and at $485 for butane for December 2025. These prices rose from the previous month but are well below $635 for propane and $630 for butane in December 2024. This shows its intention to compete with the US. In 2026, sales competition between the Middle East and the US might heighten in Asia, where demand is forecast to grow.