Record US exports, Panama Canal congestion and vanishing Middle East flows combine to create the tightest VLGC market on record

From firm footing to record territory
The VLGC market entered 2026 on solid ground, with spot earnings averaging USD 73,600 per day in January and February, approximately 50% above the 2025 average. The onset of the Middle East conflict caused a brief dislocation, with earnings initially falling 30% to around USD 48,000 per day as Persian Gulf activity halted and bunker costs surged. The recovery has been dramatic. By early May, VLGC spot earnings on the US Gulf-East benchmark had spiked to approximately USD 170,000 per day, the highest level ever recorded.

Atlantic basin fills the void
With Hormuz transits running +90% below normal levels, the Atlantic basin has become the fulcrum of global LPG trade. US exports rose 20% month-on-month in April to a record 7 million tonnes, directed overwhelmingly toward Asia. The rerouting has created severe Panama Canal congestion, with 15 VLGC’s waiting at anchorage on average in early May and waiting times exceeding three days. An estimated 50% of US LPG exports to Asia now route via the Cape of Good Hope, adding further to Voyage distances and absorbing significant vessel capacity across the global fleet.

A structurally transformed market
US exports accounted for 25% of global LPG seaborne trade a decade ago, rising to approximately 50% by 2025, making Panama Canal dynamics and West-East arbitrage the dominant market drivers. Until Persian Gulf flows normalise and Canal congestion eases, the conditions underpinning today’s exceptional earnings appear unlikely to reverse.