Executive Summary:
Infrastructure: US Gulf Coast ethylene prices have moved sharply higher since tensions with Iran escalated, but the real driver is a shift in global feedstock economics.
Exports:
NGL exports declined 18.9% W-o-W for the week ending March 13, driven by a sharp drop in LPG volumes, partially offset by strong growth in ethane exports.
Rigs:
The total US rig count decreased during the week of March 7 from 521 to 520. Liquids-driven basins increased W-o-W from 392 to 393.
Flows:
US natural gas volumes in pipeline samples dropped 0.4% W-o-W, averaging 82.0 Bcf/d for the week ending March 15.
Infrastructure:
US Gulf Coast ethylene prices have moved sharply higher since tensions with Iran escalated, but the real driver is a shift in global feedstock economics.
As oil prices rise, so do the costs of oil-linked petrochemical feedstocks such as naphtha and LPGs, which still make up the majority of the global petrochemical feedstock slate. That dynamic is lifting ethylene prices globally, including on the US Gulf Coast.
The disruption around the Strait of Hormuz is amplifying that pressure. According to the International Energy Association, roughly half of LPG exports moving through the strait ultimately flow into petrochemical demand. Any disruption to those flows tightens global feedstock availability and raises the marginal cost of ethylene production.
At the same time, US petrochemical producers are largely insulated from the feedstock shock. Most Gulf Coast crackers are designed to run ethane, which remains priced much closer to natural gas than to oil and has not seen the same price movement as LPG or naphtha. The result is a widening margin effect: ethylene prices are rising while feedstock costs remain relatively flat. In practical terms, US crackers are seeing margin expansion simply by continuing to run.
A similar dynamic is emerging in Asia. Chinese propane dehydrogenation (PDH) units are already under pressure as propane supply tightens and LPG prices rise. But Chinese ethane crackers continue to receive steady inflows of US ethane and are largely insulated from disruptions in the Persian Gulf. That gives them a relative cost advantage just as competing LPG-based units face tightening feedstock markets.
The shift is notable given the concerns in 2025 around restrictions on US ethane exports to China. Since then, China has reduced its reliance on US LPG imports while ethane shipments to Chinese crackers have continued to grow.
The broader lesson from the current disruption is that diversification matters. Petrochemical systems heavily exposed to oil-linked feedstocks are far more vulnerable to geopolitical shocks, while operators with access to alternative feedstocks and diversified supply chains are proving more resilient. In an increasingly volatile energy market, flexibility may matter just as much as cost.
Exports:
NGL exports declined 18.9% W-o-W for the week ending March 13, driven by a sharp drop in LPG volumes, partially offset by strong growth in ethane exports.
LPG exports fell 30.7% W-o-W. While PSX Freeport increased 13.8%, all other terminals declined materially, with most posting decreases of more than 40%.
In contrast, ethane exports rose 37.6% W-o-W, with nearly all terminals reporting higher volumes, driving the overall increase.
Rigs:
The total US rig count decreased during the week of March 7 from 521 to 520. Liquids-driven basins increased W-o-W from 392 to 393
- Anadarko (+1): Mewbourne Oil
- DJ (-1): Overland Resources
- Eagle Ford (+1): Chevron Corporation
- Permian:
- Delaware (-1): Permian Resources, LLC
- Midland (+1): Summit Petroleum Corporation
Flows:
Note: East Daley has vetted our US pipeline samples and upgraded the data tagging, resulting in a more robust capture of production trends from the daily samples.
US natural gas volumes in pipeline samples dropped 0.4% W-o-W, averaging 82.0 Bcf/d for the week ending March 15.
Flows in gas basins decreased 0.3% to 51.6 Bcf/d. The Haynesville sample decreased 0.2% to 12.0 Bcf/d, and the Marcellus+Utica lost 0.3% W-o-W at 38.7 Bcf/d.
Samples in liquids basins declined 0.1% W-o-W to 22.6 Bcf/d. The Permian sample decreased 1.5%, while the Anadarko sample declined 0.5%.
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