Gas rates surge amid Middle East instability

The LPG market experienced a strong recovery in June, culminating in a sharp upswing in week 26. Benchmark rates on the Arabian Gulf–East Asia route climbed to over USD 70,000/day – the highest levels recorded this year. Earlier in the month, spot rates on the Houston-Chiba route also rose nearly 10% week-over-week, reaching USD 55,000/day, driven by robust US exports and favourable arbitrage conditions. Although rates eased slightly in the final days of June – partly due to a potential de-escalation in the Iran-Israel conflict – the LPG sector continues to enjoy solid earnings.

Momentum supported by tariffs and US capacity growth
Supportive fundamentals underpinned the market throughout the month. A temporary pause in US-China tariffs helped stabilize Eastbound flows, while new export infrastructure in the US is expected to come online later this year. Even during quieter periods, VLGC earnings on core routes such as Ras Tanura-Chiba remained well above 2024 averages, reflecting solid fleet utilization and trade flow resilience.

Sustainability gains traction: ammonia in focus
June also marked a series of key developments in sustainable shipping. A major trading firm placed one of the first confirmed orders for ammonia-capable MGCs, signalling broader industry commitment to alternative fuels. In parallel, two major infrastructure projects were announced in Australia: an offshore carbon capture facility linked to ammonia production, and a future ammonia bunkering terminal at Dampier. Together, these projects support the structural case for ammonia adoption as a scalable marine fuel.

EMF’s portfolio of three VLACs remains well positioned to benefit from  the long-term transition to low-carbon shipping solutions.