Last week the price of isobutane in Mont Belvieu soared above 145 c/gal, the highest in four years and the differential between iso and normal butane blew out to more than 40 c/gal (right chart, purple dashed oval), the first time that has happened since 2024. As we described in our blog You Can Just Iso my Butane, the NGLs isobutane and normal butane have the same chemical formula (C₄H₁₀ — four carbon atoms and ten hydrogen atoms) but different molecular structures.
Consequently, the two products have different properties that make them suitable for different uses and, therefore, very different markets. Normal butane is used primarily as a low-cost, high-RVP gasoline blending component, while isobutane is used mainly by refineries as a feedstock for alkylation to produce high-octane alkylate, along with smaller specialty uses such as aerosol propellants and refrigerants.
Most isobutane is produced at natural gas processing plants, but significant volumes are produced (and used) within refineries. The product is also produced through the conversion of normal butane into iso. The typical differential between the products is 5 c/gal (red line, left chart).
