Natural Gas and Oil Forecast: Saudi Pipeline Outage Deepens Supply Risk

• The Saudi pipeline outage affects 4 mb/d of crude transport to the Red Sea export terminal at Yanbu, with extended downtime expected to reduce Saudi export capacity significantly.
• Strait of Hormuz traffic has fallen 29% to just 10 ships per day, compounding supply risks from two critical export routes that previously handled over 20% of global oil flows.
• Natural gas prices benefit from stronger U.S. LNG demand as Middle East disruptions remove 36 million tonnes of LNG capacity, with prices testing $2.92 resistance after rebounding from $2.78 support.

Market Summary: Energy Supply Disruptions Drive Bullish Sentiment

Key Developments

Saudi Arabia's East-West pipeline remains offline following Houthi rebel attacks on the Khamis Mushait airbase, disrupting approximately 4 million barrels per day (mb/d)—roughly 4% of global oil supply. The pipeline typically transports crude to Yanbu on the Red Sea, bypassing the Strait of Hormuz for exports.

The Strait of Hormuz faces severe constraints with only 10 ships per day transiting versus the previous 14-ship average, significantly impacting the route that historically carried one-fifth of global oil supplies. Combined disruptions from both critical export channels have intensified supply concerns.

Market Impact

The International Energy Agency drastically revised its 2026 outlook, projecting a 5.7 mb/d decline in global production, primarily due to persistently low Gulf supply.

Current Prices (as of September 15, 2026):

• Natural Gas: $2.89 (+0.77%), testing resistance at $2.92
• WTI Crude: $103.22 (+0.49%), targeting $104.94 breakout
• Brent Crude: $107.48 (-0.34%), eyeing $109.95 resistance

Natural Gas Dynamics

U.S. Lower 48 production averaged 113.4 bcfd in September, reaching a two-week low. However, strengthening LNG feedgas demand provides support. Disruptions in Qatar and UAE exports have removed an estimated 36 million tonnes of LNG from 2021 markets, increasing demand for U.S. LNG replacement cargoes.

Technical Outlook

All three commodities maintain bullish fundamentals. WTI holds above its rising trendline with support at $101.00, while Brent maintains support at $105.14. Natural gas shows moderate bullish momentum above $2.84 support.

Geopolitical tensions remain elevated as Gulf nations postpone Iran negotiations, sustaining supply risk premiums across energy markets.