Soaring Transatlantic VLGC Freight Offsets Slump in European Spot Propane Prices
The jump in transatlantic Very Large Gas Carrier (VLGC) freight has mitigated the slump in liquid petroleum gas (LPG) prices in Northwest Europe as crude prices tumble, according to OPIS pricing data.
With softening global oil prices hitting both the bunker fuel and product market, the declines could have been much greater for the overall OPIS CIF Amsterdam-Rotterdam-Antwerp (ARA) physical propane assessment had it not been for rising freight taking a larger proportion of the CIF price.
The OPIS-assessed Houston-Flushing VLGC spot freight rate closed at $163.50/metric ton on May 8, up $25.50/mt on the week. The OPIS Houston-Flushing VLGC freight rate accounted for 26.43% of the CIF ARA assessment on Friday amid climbing freight and an under-pressure product market.
The so-called ‘weight of freight’ is currently at its highest level since Nov. 28, 2023, when the freight accounted for 26.65%, OPIS data showed. The significant difference between the two occasions is the current higher freight and product levels.
LPG carrier freight rates in November 2023 were buoyed by a tightness in the fleet with vessels taking longer voyages to avoid the significant delays and auction fees at the Panama Canal. There was increase in vessels being offered to Europe, negating the stress associated with chartering to Asia.
Freight rates for gas carriers are now at all-time highs from the U.S. Gulf to both East and Western destinations, brought about by an increase in spot chartering demand since the start of the Israel/U.S. war with Iran, which has all but nullified cargoes shipped from the Persian Gulf.
LPG exports to Northwest Europe, aboard Handysize gas carriers and large vessels, reached 591,000 mt in April, data from shipping analytics provider Vortexa showed. Imports in April were at their highest level since November 2025, OPIS shipping data showed.
In May, LPG volumes heading to Northwest Europe from the U.S. have reached 458,000 mt. Simultaneously, global bunker fuel and oil assessments have fallen over the last week with peace talks taking place between the U.S. and Iran.
The OPIS Houston 0.5% Very Low Sulfur Fuel Oil (VLSFO) assessment closed at $822/mt on Friday, down from $881/mt a week earlier. And the OPIS’ Houston Low Sulfur Marine Gasoil (LSMGO) assessment traded at $1,165/mt on Friday, down from $1,210/mt on May 1.
And on the oil markets, the July Intercontinental Exchange (ICE) Brent crude futures contract settled at $101.89/bbl on Friday, down from $108.61/bbl a week earlier. The June West Texas Intermediate NYMEX crude oil futures contract closed at $95.42/bbl on Friday, down from $101.94/bbl a week earlier.
Subsequently, this has driven OPIS CIF ARA physical propane assessments lower, falling below $600/mt for the first time since Feb. 26 on Thursday, two days before the attacks on Iran began.
The physical propane marker closed at $599.50/mt on Thursday, down $96.50/mt from a week earlier and $261/mt from the beginning of April. However, the European marker did post a $19/mt rise on Friday to return above the $600/mt threshold at $618.50/mt.
—Reporting by Jamie Aldridge, jaldridge@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com