Crude Is Expensive. Propane Is Still Discounted. The Ratio Tells the Story.

Historical Context: May 18, 2026

Gasoline was expensive. Diesel was expensive. Crude was carrying war risk, global demand pressure, and constant supply disruption. Yet propane, while higher than it was a few months earlier, had not moved with the same force.

That raised a serious question for propane buyers, owners, and operators: Why was propane still relatively low compared with crude oil and other refined fuels?

The article’s answer at the time was that propane was trading like a market with strong U.S. and Canadian production, high inventories, active exports, and enough supply cushion to absorb headline risk.

The Ratio Is the Signal

A useful way to read propane value is to bring crude oil and propane back to the same unit. Crude oil trades by the barrel. Propane trades by the gallon. Since one barrel equals 42 gallons, crude can be converted into a gallon-equivalent price and compared with propane.

The publication used a 45% to 55% propane-to-crude range as a working reference point. When propane was inside that range, it was closer to a normal relationship against crude. When propane fell below it, propane could be relatively cheap compared with crude oil.

From September through December 2025, the ratio mostly traded near the lower side of the 40% range. In March, April, and May 2026, the ratio dropped into the low-to-mid 30% range.

As of May 18, 2026, the publication calculated May month-to-date Mont Belvieu propane at $0.842 per gallon, WTI crude at $104.55 per barrel, crude at $2.489 per gallon, and the propane-to-crude ratio at 33.8%.

Those are historical figures, not current prices.

Inventories and Exports in the May 2026 Analysis

Inventories: A Major Reason Propane Remained Discounted

High inventory did not mean every region was comfortable. A local terminal could still get tight. A rail delay could still hurt a market. A cold snap could still expose weak planning.

At the national level, however, the article concluded inventories were not sending a shortage signal. It cited an EIA expectation that U.S. propane inventories would remain above normal through most of 2026 and could peak near 112 million barrels in October 2026. That forecast is historical.

Exports: The Release Valve

The article reported that U.S. propane exports averaged about 1.8 million barrels per day in 2025, a record level, and described exports as a release valve for strong U.S. production.

It cautioned against reading exports alone. The better approach was to read exports against production, inventory, seasonality, and the propane-to-crude ratio.

The PAM View at That Time

Crude oil and propane were connected, but they were not the same market. In the May 2026 analysis, crude was carrying a war premium while propane was carrying an oversupply discount.

The publication concluded that smart propane buyers should read the ratio, inventory, exports, and season—not just headlines.