Global LPG Market Snapshot

Given the instability in the oil market over the past couple of years, the recent environmental activism against climate change culminating in the crescendo that was COP21, there is very little debate on the subject; LPG is the fuel of the future. Both are extracted in a similar way and both have the same method of transportation for both upstream, midstream and downstream activities.

On top of this, LPG is cleaner and greener. It is relatively safer, as compared with oil and it has a relatively stable price, unlike oil which is at the mercy of the capricious global oil glut phenomena. LPG is mainly utilised for heating, and cooking purposes, in addition to being used in automobiles as fuel.

Global LPG Market

Several developing economies, in a bid to spur sustainable development, are resorting to the use of natural gas over crude oil, which dominated (and still continues to dominate, to some extent) the global energy market. The aforementioned positive factors are the major reason for this global pivot towards Global  LPG M market , at the cost of crude.

Of course, given that crude still enjoys considerable dominance, and, with the low oil prices, the demand side of the global oil economy is in phenomenal shape, LPG dominance would not be an easy task. As of 2015, LPG production was just shy of 300 million tons, a phenomenal incline from 2011 when it was around 250 million tons, but far behind the 95 million barrels per day (just under 15 million tons per day) of oil produced in 2015.

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While geopolitics does come rather heavily into play. The essence of the energy market is such that the competition between oil and natural gas is seen as a zero-sum game, and to a certain extent this dynamic makes sense.

Over 47% of all oil in the United States goes towards automobiles; for natural gas the share is close to 10%. Now a shift from oil guzzling automobiles will be towards hybrid vehicles, which are still smaller in number and not quite as economical for most sections of society, or towards LPG, thus substantively making this a zero-sum issue.

There are several other such issues which make cruder and LPG direct competitors. Growth in seaborne exports of LPG  Market is another one. Valuable port space can be used either for crude or for LPG and therefore gas tankers and oil tankers are at odds sometimes, though this is a somewhat smaller concern.