Hindsight is 20/20
This catchy phrase implies that we have the ability to more clearly understand events and their impacts after they have occurred. As we close out calendar year 2025, this is what we want to do. We want to look back at events that impacted the energy industry this year. If hindsight really is 20/20, we should have a better understanding of these events and how their impacts could affect the industry going forward into the new year.
Tariffs
It would be impossible to start (or end) this year without a discussion of tariffs. Before President Trump’s inauguration, tariff threats were already being tossed around. Then, mid-first quarter, actual tariffs were introduced.
Impacts: North America
This introduction prompted a flurry of speculation. There was an actual three-day period in March where tariffs were enforced on Canada and Mexico. That three-day period gave the propane market a small glimpse of the higher costs that could occur IF tariffs were fully implemented. Items on the USMCA (previously NAFTA) agreement were quickly exempted, and propane moving within North America managed to avoid tariffs for the remainder of the year.
Impacts: Shift in Buying Habits
For other nations, tariffs were, and continue to be, a major negotiation point. One impact has been a shift in buying habits. The second half of 2025 saw India issue an LPG bid for 2026 specifically to U.S. based suppliers. This was eventually completed with up to 10% of India’s 2026 LPG need coming from U.S. supply firms.
Another consequence of this action by India was a strong price reduction in the Saudi CP LPG price for the fourth quarter. That decrease in international LPG prices placed additional downward pressure on U.S. prices. Combine this with the fact that U.S. propane inventory levels reached record highs during the fourth quarter, and propane prices saw their lowest levels in 2025 during this three-month period.
Impacts: U.S. Production Increase
At the beginning of 2025, propane (LPG) values were strong and moving higher. The threat of tariffs, along with a brief period of enforcement, kept values stronger. Hindsight on tariffs, however, saw that they pushed nations and firms into new and creative buying strategies. None of the tariffs were able to slow down the reality that U.S. natural gas liquids production (NGLs) was continuing to move higher.
Another reality that tariffs couldn’t change was the fact that the U.S. LPG export infrastructure was reaching a max capacity point. Infrastructure will expand in 2026 and 2027, but that future expansion could not prevent a product glut.
Conclusion
Rounding out our review of 2025, we saw a huge amount of fear and volatility generated by tariffs. Exempting propane from North American tariff fees and essentially pushing some nations to make purchases from the U.S. (India as an example) also worked toward creating a lower price environment for the LPG markets in the last quarter of this year. Somehow, I doubt that anyone was projecting that outcome back in January 2025.
Which goes toward proving the truth of the phrase: “hindsight is 20/20.” Sometimes we only clearly understand the impacts of events after they occur.
Using “Hindsight” to Plan for the Future
Once we see the past clearly, we can better plan for the future. Westlark Advisors is committed to helping our energy industry clients manage volatile commodity markets, and we will continue to closely watch the propane (LPG) markets in 2026.
In January 2026, the Westlark Team will share some of our prognostications for the new year, including specific items to watch.
Year in Review 2025
By JD Buss
