Impact of war in Iran not yet seen in LPG charter rates, India drives market attention

LPG carrier and product tanker operator SeaHawk Group’s managing director, Michael Kourtesis, told Riviera that around 12 VLGCs remain trapped in the Middle East Gulf, along with several smaller LPG carriers.

Intelligence services and data provider Anfil Gas, which specialises in the VLGC market, shared data with Riviera showing that, since the outbreak of the war on 28 February, two vessels – HH Glory and Danuta I – have exited the Strait, while a third, Navixon, has entered. All three are linked to Iranian trade.

Despite the sharp decrease in crossings, Mr Kourtesis noted that the disruption has not yet translated into significant changes in charter market rates.

“It is not clear how the market will react,” he added.

Arbitrage opportunities could push rates higher, as seen recently in the tanker market. On the other hand, the temporary loss of such significant cargoes in the region could weigh negatively on rates.

Overall, Mr Kourtesis is cautiously optimistic about the market, noting that disruptions often benefit the shipping industry.

In parallel, the Greek owner said the war’s impact on the ammonia trade is already influencing the market, due to its significant intraregional activity. He added that vessels are now being fixed for floating storage in the region.

Focus on India

One market likely to influence LPG flows is India, which relies heavily on Middle East cargoes. Mr Kourtesis noted that the country could now cover some import needs from the United States, which would be a significant positive for the market by boosting tonne-miles.

According to Anfil Gas, the lack of Middle East Gulf cargoes has become a major issue for Indian importers. However, spot cargoes with prompt delivery are limited.

Currently, around 360,000 tonnes of LPG destined for India remain trapped in the Gulf, while only 162,000 tonnes are expected to be discharged in the coming days.

Anfil Gas estimates that nearly 400,000 tonnes of US-sourced volumes are scheduled to arrive gradually in India by the end of March.

Meanwhile, tight propane supply, combined with surging prices, has minimised spot interest from Chinese buyers, while PDH plant run rates have been forced down, reportedly below 60%, according to Anfil Gas.

Total flows to the Far East from all export sources have been reduced to nearly 4.3M tonnes per day, underscoring the region’s current short supply, the intelligence provider added.