Will US Propane Prices Go Up Due to War in Iran?

According to a number of sources, it is expected that U.S. propane prices may increase by 9% due to the war in Iran disrupting fuel prices.

Since the war with Iran has caused that country to shut down the Strait of Hormuz, a vital shipping route for oil produced in the Middle East, the world supply of oil has been severely restricted.

In any free trade situation, when the supply of a resource becomes limited, its scarcity value increases causing price rises all over the world.

Strait of Hormuz

Credit: https://commons.wikimedia.org

Why the War Affects Propane Prices

This shortage has caused oil prices to rise across the globe with oil derived fuels such as propane following suit, leading to higher retail prices especially in the United States.

There are several major reasons why the war with Iran is affecting propane prices:

Disruption in the Middle East:

The blockages near the Strait of Hormuz are a direct result of the Middle East conflict, effectively cutting off the transportation of fuel which includes liquefied petroleum gas (LPG) exports.

Higher Domestic Export Demand:

Fuel buyers in Europe and Asia rely more heavily on U.S. supplies now that the supply from the Middle East has become severely restricted. This increase in exports constricts domestic inventories in the United States.

Increased Transport Costs:

In response to the restriction of the oil supply from the Middle East, the associated rise in global diesel prices are driving up logistics expenses for the shipping of propane via all traditional modes of transportation.

What Are the Forecasts for Winter?

It is expected that the increased cost of fuel will be reflected in higher winter energy prices across the country.

Propane Costs:

Propane home heating costs are expected to increase by approximately 9% according to projections from the National Energy Assistance Directors Association, compared to last year. This affects both fixed and portable heaters using propane as their primary fuel.

Cost of Other Fuels:

Other home heating fuels are also expected to rise in price. For example:

• Home heating oil is expected to rise in price by over 30%
• Electricity bills will increase by around 9%
• Natural gas prices will increase by around 6%

Not All Bad News

On a brighter note, the cost of solid fuel for heating is not expected to rise when sourced locally.

This is because the cost of transportation of logs and coal over short distances can be mitigated by higher demand to maintain profits. Many households collect wood for heating from local suppliers, helping to keep transportation costs stable.

Summary

Overall, the cost of heating homes and workplaces with propane and other oil derived fuels is expected to rise sharply this winter compared to last year.

Now is a good time to perform maintenance on heating systems to ensure they are performing at their best efficiency. This is so that every measure of fuel is used as economically as possible to keep you cozy and warm this winter.

How Safe is Propane as a Fuel for Heating a Home?

It's quite common to be concerned over the safety of a household heating appliance especially one that uses a highly combustible fuel such as propane. While it's quite true that a canister of this compressed gas can explode under extreme circumstances, the chances of that happening in a domestic situation are highly remote at best.

If you want to put things into a real life perspective, here's a comparison that will make you think about it in the cold light of day:

How Combustible Do You Want to Get?

I can probably safely assume that you are quite happy to get into your car or truck and drive to wherever you want to drive to and back again, right? Do you ever stop to think about what you're carrying around with you inside your automobile?

That tank of gas is safely tucked away out of sight so you don't have to even think about it. Because if you did think about it, my guess is that you would probably never set foot within a hundred feet of any car. Why?

Gasoline (petroleum spirit) is not only highly combustible, but it's one of the most volatile fuels in common everyday use. That tank of gas will explode if the vapors come into contact with the merest spark, let alone a naked flame.

That's why there are signs up all around gas stations telling you not to smoke. The spark from a cigarette lighter could potentially ignite the whole place!

So Now How Worried Are You Over Propane?

With that example as our perspective, consider that canister of compressed propane (in liquid form under pressure) that's providing you with cheap and efficient indoor heat. Here is a gaseous substance that comes from the same place as the gasoline in your car, since it's a by-product of refined crude oil.

Yet propane, whether in liquid or gaseous form, is considerable less volatile than gasoline. It's true!

You would literally have to open the valve on the can and hold a lighted flame to the escaping gas to ignite it and even then, all you'd end up with would be a gushing plume of burning gas. To cause the canister to explode, you'd have to get that burning fuel to invert and enter the canister, which is pretty difficult since the pressure in inside it forcing the gas out.

Either way, it's a whole lot tougher to ignite a canister of household propane than it is to ignite a tank of gasoline. Hopefully, there are your safety concerns taken care of.

So if you're cool about driving your car, then you should be totally unconcerned about firing up your little heater to keep you cozy and warm  in your home because it is much safer and many times less likely to explode than is your car. How's that for a nice slice of food for thought for the day?