Petroleum products

Ethane exports and production
As of the time of publication of the May STEO forecast, China has waived a 125% tariff on U.S. ethane imports. Nearly half of U.S. ethane exports go to China, and all of China’s ethane imports come from the United States with practically no options for alternative sources.

Although there is uncertainty related to the changing tariff policies, we forecast U.S. ethane production will rise in 2025 and 2026 because of higher U.S. exports of ethane in both years. U.S. ethane exports have been increasing because of higher global petrochemical demand, ethane that is low cost compared with other feedstocks, and a growing, higher capacity tanker fleet to ship the ethane.

We forecast the United States will export 540,000 barrels per day (b/d) of ethane this year and 640,000 b/d in 2026. U.S. production of ethane in our forecast reaches 2.9 million b/d this year and 3.1 million b/d in 2026, up from 2.8 million b/d in 2024.

Ethane is a natural gas liquid that’s primarily extracted from raw natural gas during processing. Ethane is mainly used as a feedstock for ethylene production, one of the most important building blocks in the petrochemical industry. Ethylene is a gas used to produce a wide range of products, including plastics, resins, and synthetic rubber. The United States and Norway are the only countries with the infrastructure to export waterborne ethane, but ethane has not been separated out of the natural gas stream in Norway the past few years because of high natural gas prices in Europe.

We expect Wanhua Chemical’s newly started flex-feed cracker—which can take ethane or naphtha as feedstock—in Yantai, China, could add 50,000 b/d to 75,000 b/d of U.S. ethane export demand this year. In mid-2026, we expect the INEOS Project One ethylene cracker to come online in Antwerp, Belgium, which can take up to 75,000 b/d of ethane. The INEOS cracker will be the largest in Europe and among the largest in the world, and it will be vertically integrated by importing ethane and producing polyethylene or other polyolefins.

U.S. ethane exports averaged a record 492,000 b/d in 2024, a 21,000-b/d increase from the previous record set in 2023. Growth in global petrochemical-sector demand and rising tanker capacity have driven the increases in U.S. ethane exports. Low prices for U.S. ethane compared with other feedstocks globally contributed to the record exports last year.