‍LPG supply in New Zealand less impacted by Iran conflict

3 June 2026

With domestic production of LPG supplying around 70 percent of demand, New Zealand’s LPG supply situation is less affected by the Iranian conflict than some countries. 

Globally, due to the conflict and the closure of the Strait of Hormuz, the worldwide LPG market is undergoing its most “severe structural reorientation and stress test in history”, according to the World Liquid Gas Association (WLGA).

Production from the Persian Gulf formerly accounted for one third of the international LPG trade, but Middle Eastern LPG exports plummeted from around 4 million metric tonnes in January to 1.3 million metric tonnes just two months later.

Consequently, the global market turned to the United States Gulf Coast for supply, with LPG exports increasing by nearly a million metric tonnes a month to 6.3 million metric tonnes in March.

Asian importers have felt the brunt of the constrained supply from their traditional Middle East supply source, some now buying split cargoes of butane and propane from the US and South America to plug the gap.

While there is no global LPG shortage, the market is tight, prices are increasing and supplies are being re-routed, the WLGA says.

International prices for butane and propane have increased from US$540 per tonne in March to around US$800 in May. (Propane US$760, butane US$820.)