Intensified sanctions are curbing Iranian exports of liquefied petroleum gas just as U.S. LPG sales are on the rise.

Last year, Iran sold 18 percent less LPG, while U.S. exports climbed by 27 percent, according to the Energy Department and Oslo, Norway-based ship broker Joachim Grieg & Co. LPG is a byproduct of natural-gas output used in petrochemicals and cooking. It can also be refined from crude oil.

Iran is facing tougher sanctions over its controversial nuclear program, which the European Union and the United States say is aimed at attaining nuclear weapons. Tehran maintains that the program is for peaceful purposes only.

The European Union has already prohibited vessels insured in any of its 27 member states from carrying Iranian energy products. But in October, the European Union expanded those measures to include propane and butane shipments from Iran. Roughly 90 percent of the world's merchant fleet is insured in the European Union.

"In Iran you clearly see the declining trend, but don't forget the U.S. is expanding, so there's some substitution," said Steve Engelen, the Oslo-based head of research at Joachim Grieg. "More buying and selling and shifting trade tends to be positive for shipping."

The U.S. surge has driven up tanker rates for BW Group Ltd. and other ship owners. Investment bank RS Platou Markets AS estimates tanker rates will climb 6.7 percent in 2013 to an all-time high of $32,000 a day. Demand for export terminals is also expected to rise.

Hamilton, Bermuda-based BW Group runs the world's largest fleet of "very large gas carriers," with 22 vessels. Each one can carry 44,000 metric tons of cargo, or enough gas to grill about 1 trillion minute steaks. The company's $500 million 6.625 percent bond due in June 2017 climbed 22 percent in the past year to 108.50, according to Trace, the U.S. Financial Industry Regulatory Authority's reporting system.

"Given the prospects for shale oil and shale gas, U.S. LPG exports are set to continue to rise," said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo. "The overall volumes picture is positive. BW Group is sure to benefit" (Isaac Arnsdorf, Bloomberg, Jan. 14). -- BS