Propane Export Demand Widens Price Gap Between Mont Belvieu and Conway
The two key U.S. propane hubs have developed a pronounced split in prices as these markets are taking on vastly different roles in evolving global movements of supply and demand.
Propane prices at Mont Belvieu in Texas have grown increasingly tethered to U.S. Gulf Coast exports as the conflict in Iran has choked off traditional supply routes overseas. The Conway hub in Kansas, meanwhile, serves more domestic and winter heating-season demand.
This combination has driven Conway to trade at a notable discount to Mont Belvieu as of late.
Mont Belvieu TET propane prices during the first week of June were seen at a month-to-date average of around 83.2cts/gal, compared with 72.725cts/gal at Conway, according to OPIS pricing data.
That put the differential between the two regions, known commonly as the north-south spread, at over 10cts/gal, which is unusually wide by historical standards. The larger gap is helping encourage excess propane stored in the U.S. Midcontinent (PADD2), represented by Conway, to move south toward the Gulf Coast (PADD3), i.e., Mont Belvieu.
In comparison to the first week of June 2025, according to OPIS Time Series data, the month-to-date average for Mont Belvieu propane TET prices was around 73.1125cts/gal, while Conway averaged 70.175cts/gal, reflecting a spread of just 2.9cts/gal.
“The current high price premium that Mont Belvieu has over Conway certainly incentivizes more propane to flow south that will eventually tighten the Midcontinent market relative to Gulf Coast market,” said Peter Fasullo, principal at EnVantage.
The U.S. and Israeli-led war in the Persian Gulf and subsequent closure of the Strait of Hormuz have disrupted nearly 40% of global LPG export supply. Subsequently, U.S. LPG exports have surged. Market participants view the wider north-south spread as evidence that the industry is working aggressively to redirect supplies and meet as much displaced international demand as possible.
However, the pricing picture changes further out along the forward curve. According to OPIS NGL Forwards data, July TET propane futures were assessed at around 78.6875cts/gal in Mont Belvieu and 72.8125cts/gal in Conway as of June 9, narrowing the north-south spread to just under 6cts/gal.
The difference shrinks even further by early 2027. January 2027 projections showed Mont Belvieu TET propane near 80cts/gal versus 79.375cts/gal in Conway, narrowing the spread to less than 1ct/gal.
The reason for this pattern lies in the very different market fundamentals that have developed in PADD3 propane over the last several years.
While U.S. propane production has expanded dramatically, from less than 1.5 million b/d about a decade ago to currently around 2.8 million b/d, domestic demand has limits. As a result, export economics have become increasingly important in setting prices.
“Mont Belvieu propane prices are more influenced by international propane prices than Conway due to the vast amount of propane export capability on the Gulf Coast. The Iranian crisis is elevating international propane prices due to closing of Strait of Hormuz, hence the greater pull on Mont Belvieu prices. It may take several months for this crisis to be resolved, but when it normalizes, the upward influence on Mont Belvieu should lessen,” Fasullo said.
These export-focused dynamics have also made Gulf Coast propane prices less sensitive to seasonal swings in U.S. demand.
Conway, by contrast, remains more closely tied to traditional seasonal demand factors. Many households across the Midwest and Plains rely on propane for winter heating, creating strong demand during colder months.
The agricultural sector also plays an important role. From mid-October through the end of November, farmers often use propane to dry crops when wet weather or limited sunshine slows the harvest process. This creates a concentrated multi-week period of additional demand.
For the remainder of the year, excess propane supplies in the Midwest can generally move south when needed and eventually reach international buyers through Gulf Coast export terminals.
As a result, current forward price curves through the beginning of 2027 suggest that Mont Belvieu is positioned for sustained export demand, while Conway prices are gradually strengthening in anticipation of the next seasonal demand increase during the fall and winter.
“It looks like the market is assuming that in six to seven months, the Iranian crisis should be resolved, Midcontinent propane balances should be tighter relative to the Gulf Coast, and winter weather will influence Conway propane prices more than it will Mont Belvieu prices. The combination of all these factors or assumptions results in the compression of the price spread between Conway and Mont Belvieu,” Fasullo added.
Reporting by Alan Lammey, alammey@opisnet.com and Rajesh Joshi, rjoshi@opisnet.com; Editing by Jessica Marron, jmarron@opisnet.com