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Released April 10, 2025 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--U.S. exports of propane have risen sharply in recent years, but the future may not look like the recent past given the extraordinarily dynamic tariff wars convulsing global trade.

Billions of dollars of proposed investments in the U.S. may depend on how the tariff issue concludes. There is no sign it is nearly over.

On an annual basis, U.S. exports of propane rose to about 651 million barrels in 2024, or more than 1.5 million barrels per day. That's up about 322% from 2014, when annual exports totaled about 154 million barrels, according to data from the Energy Information Administration (EIA). Two decades ago, in 2004, the U.S. exported only about 10 million barrels of propane for the year.

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Click on the image at right to see a graphic of annual U.S. exports of propane.

The largest importers of U.S. propane include China, Japan, South Korea, Europe and Mexico, according to a March 13, 2025, analysis from the EIA. The agency observed, "Annual U.S. propane exports to Asia grew 13% in 2024 compared with 2023, a 131,000-barrels per day increase, with most going to Japan, South Korea and China. Chinese consumption accounts for most of the growth in U.S. exports to Asia; U.S. propane exports to China grew by 40% in 2024. Increasing propane exports to Asia are driven in part by the region's increasing demand for propylene."

In another EIA report, its March 11, 2025 "Short-Term Energy Outlook," the agency said this: "Propane and butane exports have been growing annually for nearly 20 years, and we expect exports of these fuels to continue growing through 2025 and 2026 because of higher production and lower domestic prices relative to international benchmark prices, incentivizing demand for U.S. propane and butane in Asia."

Propane exports have shot up because U.S. propane production has surged in recent years as part of the fracking era. Though domestic demand has risen, supply still exceeds demand for the fuel, leading to record exports. In an April 7 analysis, the EIA said, "Record U.S. propane production at natural gas processing plants has allowed for higher consumption as well as record-high exports, which have grown annually in the past 17 consecutive years because of increasing global demand for propane as a petrochemical feedstock."

Expanded use of propane in overseas countries could go a long way to alleviating energy poverty and improving public health, according to Chris Wright, formerly chief executive officer of Liberty Energy Incorporated (NYSE:LBRT) (Denver, Colorado) and currently secretary of energy. In his January 15 confirmation testimony to the Senate Energy and Natural Resources Committee, Wright said there were 2 billion people in the world who cook their food and heat their homes with wood, dung or charcoal, leading to an estimated 2 million preventable deaths per year.

Increased exports of U.S.-produced propane could alleviate the energy poverty and improve public health in the developing world, he told the senators, adding that energy poverty is "entirely solvable." He pointed out that U.S. propane production has quadrupled in recent years, making the U.S. the world's largest exporter, and said further gains were achievable. For more on Wright's views about how U.S. propane exports could alleviate energy poverty and improve public health in the developing-world countries, see January 16, 2025, article - Senate Panel Considers DOE Secretary-Nominee in Friendly Hearing and October 4, 2024, article - Conference Speakers Decry 'False Narratives' on Global Warming, Oil & Gas.

The EIA said U.S. exports of propane are expected to continue rising in 2025 and 2026, albeit at a slower rate than previous years. In 2026, U.S. propane exports could exceed 700 million gallons for the year, the EIA forecast.

Developers have completed a few U.S. gas fractionation projects in recent years to serve the growing U.S. market and capture strong overseas demand growth. These include grassroot projects and plant expansions. Industrial Info is tracking 10 proposed gas fractionation projects with total investment value of about $4.6 billion. Some unconventional formations such as the Permian, have a high natural gas content, which has driven development of new infrastructure.

Similarly, a handful of U.S. propane export terminals have been completed in recent years to meet strong overseas demand. Currently, Industrial Info is tracking the development of a $500 million natural gas liquids (NGL) export terminal in Texas City, Texas, by ONEOK Partners L.P., a unit of ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma). Construction of that facility is scheduled to start in late 2025 and be operating by early 2027.

It is unclear if the bright future many see for U.S. propane exports will be affected by the on-again, off-again trade war initiated by the Trump administration.

China, India and European countries were among the larger targets for the first round of President Donald Trump's "reciprocal tariffs," announced April 2, which aimed to cut the trade deficit in goods traded, but not services. In that April 2 announcement, China was hit with a 34% tariff while India had a 27% tariff slapped on imports of its goods. Trump also said the U.S. would apply a 20% tariff on all goods imported from the European Union.

But since then, there have been nearly daily signs--often conflicting--about Trump's willingness to negotiate tariffs on a country-by-country basis.

The April 2 tariff announcement caused stock markets around the world to plummet.

But on Wednesday, Trump said he was instituting a 90-day pause on tariff increases, except for China, for which he raised tariffs to 125% in response to China's retaliatory move to twice increase tariffs on U.S. imports. A 10% U.S. tariff would remain in place for 75 countries that did not retaliate against the U.S., Trump said in a post on his Truth Social platform.

The stock market soared almost immediately after Trump's post.

It was unclear on Wednesday whether and how China would respond.

Another open question is how the highly dynamic tariff wars engulfing the global economy could affect U.S. propane exports. In its March SEO, the EIA, citing a February 6 analysis from the National Propane Gas Association (NPGA), said, "Recent retaliatory tariffs in China do not include propane, so U.S. exports to China are expected to remain elevated."

That may prove to be true in the end, but events may overtake the NGPA's February 6 analysis, particularly the increasingly acrimonious relations between Trump and Chinese President Xi Jinping. Economists tend to agree that trade wars and tariffs often end up hurting the countries that initiate them, an act of cutting off your nose despite your face. Will that prove that prove to be true for U.S. exports of propane? It appears to be too soon to tell definitively.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
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