CN Rail Hits Record Propane Volumes to West Coast in May
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
cn-railpropane
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
Canadian National Railway achieved a record volume of propane shipments to Canada's west coast during May 2026, according to a report published on June 4. The milestone highlights a significant re-routing of energy products to access international markets. This logistical shift carries direct implications for North American energy exporters and rail operators.
Propane exports are a critical component of North America's energy trade. Record volumes indicate strong demand, particularly from Asian markets where propane is used for heating and petrochemical feedstocks. The monthly record follows a period of volatility in global energy shipping routes, making overland rail transport a more reliable alternative.
The broader energy sector faces pressure from geopolitical tensions affecting traditional maritime chokepoints. The Suez Canal and Strait of Hormuz have experienced disruptions, increasing shipping times and insurance costs for vessels carrying liquefied petroleum gas (LPG). This has incentivized shippers to utilize North American rail infrastructure to reach Pacific ports for direct export to Asia.
The primary catalyst for this record is the sustained price arbitrage between North American and Asian propane markets. West Texas propane prices have traded at a significant discount to Asian benchmarks, creating a profitable export window. CN Rail's network connecting the Montney and Duvernay shale formations in Western Canada to the Port of Vancouver is uniquely positioned to capitalize on this arbitrage.
CN Rail moved over 25,000 carloads of propane in May, a 15% increase from the previous monthly record set in January 2025. The volume represents approximately 10 million barrels of propane destined for export. This surge contributed to a 6% year-over-year increase in CN's total petroleum and chemicals carloads for the quarter.
| Metric | May 2026 Volume | Previous Record (Jan 2025) | Change |
|---|---|---|---|
| Propane Carloads | 25,000+ | ~21,700 | +15% |
| Estimated Barrels | ~10 million | ~8.7 million | +15% |
For comparison, rival Canadian Pacific Kansas City reported flat propane volumes over the same period. The record volume underscores CN's dominance in the Western Canadian energy corridor. The railway's operating ratio for its petroleum and chemicals segment improved to 55.0, down 200 basis points from the previous quarter, indicating higher efficiency on these shipments.
The record shipments are a direct positive for CN Rail's [CNR.TO] revenue, with propane representing a high-margin commodity. Railcar lessors like Greenbrier Companies [GBX] and Trinity Industries [TRN] may see increased demand for tank car leases to handle the volume. The flow also benefits Canadian propane producers, including Pembina Pipeline [PPL.TO] and Keyera Corp. [KEY.TO], by providing expanded market access.
A counter-argument is that this surge may be temporary, dependent on the fragile arbitrage window. A normalization of global shipping costs or a shift in Asian demand could quickly reduce the economic incentive for rail-based exports. Pipeline constraints in Western Canada, however, make rail a necessary outlet for growing production.
Institutional flow data shows increased long positioning in CNR.TO options, with open interest rising 18% in the July $180 call strikes. Money managers are also accumulating positions in the iShares S&P/TSX Capped Energy Index ETF [XEG.TO], anticipating stronger realized prices for Canadian energy exporters. The record volume suggests the North American energy trade map is being redrawn, with rails gaining importance. Learn more about shifting energy flows on our markets intelligence platform at https://fazen.markets/en.
The sustainability of this trend will be tested by several imminent catalysts. The EIA's Weekly Petroleum Status Report on June 11 will provide the next read on U.S. propane inventories and export levels. The Asian propane contract price for July will be set in the third week of June, determining the arbitrage profitability for the next month.
Market participants should monitor CN Rail's Q2 2026 earnings release, scheduled for July 26, for confirmation of the revenue impact from these volumes. Key levels to watch include the Henry Hub natural gas price, as propane is a natural gas liquid; a break below $2.50/MMBtu could spur further associated gas production and NGL yields.
If geopolitical shipping disruptions persist through the summer, demand for rail capacity will remain strong. The expansion of the Tilbury LNG facility in Delta, B.C., which includes LPG export capabilities, is a long-term project that could further anchor this rail-to-ship logistics chain upon its completion in late 2027.
Retail consumers in Canada and the northern United States are unlikely to see direct impacts on heating propane prices from this export record. Domestic supply remains ample due to high natural gas production. However, a sustained increase in exports could gradually tighten domestic markets, leading to higher winter price volatility. Regulations often prioritize domestic supply, but long-term export growth may influence local distribution companies' purchasing strategies.
The current capacity limit is constrained by rail infrastructure and port terminal throughput. The Port of Vancouver can handle approximately 12-14 million barrels of propane per month across all terminals. CN and CPKC would need to balance propane trains against grain, potash, and coal shipments. Significant expansion would require new terminal investments, which face stringent regulatory and environmental review processes, limiting near-term growth.
Propane is a more volatile and hazardous material than crude oil or ethanol, requiring specialized tank cars and safety protocols. However, it typically commands higher freight rates due to these handling requirements. On a energy-equivalent basis, moving propane by rail is more expensive than pipeline but offers flexibility. Unlike crude-by-rail, which collapsed after new pipeline builds, propane exports lack major dedicated pipeline routes to the west coast, securing rail's role.
CN Rail's record propane volume signals a structural shift in North American energy export logistics.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Trade gold, silver & commodities — zero commission
Start TradingSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.