Global Shifts in Energy Trade Impact LNG, LPG Markets

High freight costs are forcing Asian buyers to cancel U.S. liquefied petroleum gas (LPG) cargoes, according to a Bloomberg report. At least two cargoes slated to depart from the U.S. Gulf Coast in June have been canceled, with discussions for more cancellations underway as shipping costs erode importer margins. This comes as Asian buyers had turned to U.S. supply to replace constrained exports from the Middle East.

The Middle East supply crunch, stemming from the Iran war and the de facto closure of the Strait of Hormuz, had driven this shift. LPG exports from the Persian Gulf supplied 92% of India’s and 26% of Southeast Asia’s imports in 2025, according to Vortexa data cited by OilPrice.com. However, soaring freight rates are now easing demand for U.S. cargoes.

In related shipping news, three oil and two gas carriers have cleared the Strait of Hormuz this week, Reuters reported. Two supertankers, one carrying 2 million barrels of Saudi crude to China and another with 1.8 million barrels of Emirati oil for India, moved through the chokepoint in "dark mode" with transponders off. An LNG carrier also passed through. Despite this activity, hundreds of vessels remain stranded in the Persian Gulf west of the strait.

The disruption has triggered a surge in U.S. energy exports, with a rare cargo of crude oil sent to the Philippines earlier this month. Prior to the war, Asia got as much as 80% of its crude from the Middle East. Global crude oil production has lost between 14 and 15 million barrels daily since the start of the conflict, according to the report.

Separately, European energy major TotalEnergies has applied for authorization for a $5.2 billion offshore wind project in Normandy, France. The 1.5-gigawatt project, which would be France's biggest renewables development, is expected to generate 6 terawatt-hours annually, powering over one million homes. TotalEnergies said it intends to focus sourcing on European suppliers, particularly for wind turbines and electric cables.

The company's strategy contrasts with other European majors like BP and Shell, which have reduced renewables spending. TotalEnergies plans to reach a 12% profitability target for its Integrated Power business and typically divests up to 50% of renewable assets once they reach commercial operation.