Islamic Republic's LPG exports collapse under naval blockade

The Islamic Republic's exports of liquefied petroleum gas (LPG) have almost stopped since the US naval blockade began on 12 July 2026. According to ship-tracking data, only about 4.1 million barrels, close to 350,000 tonnes, of propane and butane have left Iran in that period, compared with about 30 million barrels, or 2.6 million tonnes, exported in the same period last year.

According to Jemima Shelley, an analyst at United Against Nuclear Iran, at least eight gas carriers have left the Gulf of Oman since July, six of them under US sanctions. Some cargoes were transferred ship-to-ship near the Omani ports of Sohar and Shinas, and most headed for Malaysian waters, a destination that usually ends in China. US Central Command calls the blockade "ironclad".

Five billion dollars of lost revenue

After crude oil, LPG was one of the Islamic Republic's most important sources of foreign currency. Data from Kpler and Vortexa estimate 2025 exports at 10.5 to 11 million tonnes, worth more than $5 billion, and Iran's Chamber of Commerce had put exports in the fiscal year ending March 2026 at 9 million tonnes, worth $4.35 billion.

Iran produced about 13 million tonnes of LPG in 2025, nearly 80 percent of which was exported; the largest share, about 7 million tonnes, came from the South Pars gas refineries and the rest from oil refineries and the petrochemical complexes of Asaluyeh and Mahshahr. Normal domestic consumption is under 2 million tonnes a year, and that gap means millions of tonnes of LPG that now have no way to be sold.

A glut of LPG in the country

Even with a 20 to 25 percent cut in output after the war, which has brought production to about 10 million tonnes, the Islamic Republic has to find domestic uses for the surplus: limited injection into the gas grid and burning it in industries and power plants able to use LPG. This substitution depends on technical and infrastructure limits and does not replace the lost foreign currency.

The collapse of LPG exports comes alongside the halt of crude oil exports. In September, Kpler recorded the Islamic Republic's crude exports at zero for the first time since 2013, and DIAR reported earlier that the Islamic Republic's floating oil stocks in Asian waters have run out. OPEC estimates also put Iran's crude output at 1.96 million barrels a day in September, down from 3.26 million barrels a day in 2025; a fall of nearly 40 percent that shows the effect of the US naval blockade on the Islamic Republic's economy.

The Islamic Republic's LPG exports since July have fallen to about 350,000 tonnes, against 2.6 million tonnes in the same period last year.