Natural Gas and Oil Forecast: Saudi Rerouting Eases Supply Risk as Hormuz Traffic Slumps

• Traffic through the Strait of Hormuz fell dramatically to 3 vessels on June 26 compared to 12 the prior day and a 10-day average of 17, maintaining elevated supply-risk premiums
• Market disruptions have removed an estimated 1.6 billion barrels of crude and condensates since February, with previous disruption countermeasures now largely ineffective
• Qatari LNG losses estimated at 36 million tons are impacting European gas storage ahead of winter, as cheaper Middle Eastern LNG redirects flows typically destined for Europe

Summary

Key Developments

Saudi Arabia has established alternative export routes following damage to its East-West Pipeline, which disrupted crude oil flow from Eastern Province oil fields to the Red Sea port of Yanbu. These rerouting measures have eased immediate supply pressures and shifted oil markets from tight to balanced conditions.

Critical Supply Chain Data

Vessel traffic through the Strait of Hormuz collapsed dramatically on September 17, 2026, with only 3 vessels transiting compared to 12 the previous day and an average of 17 over the prior 10 days. This sharp decline maintains elevated Gulf supply-risk premiums despite Saudi mitigation efforts.

Regional Tensions

Escalating conflicts between Saudi Arabia, the U.S., and Houthi rebels in Yemen have intensified disruptions along the Red Sea and Bab el-Mandeb Strait. Since February 2026, Middle East conflicts have removed an estimated 1.6 billion barrels of crude and condensates from the market. Market executives warn that previously effective cushioning mechanisms are now largely ineffective.

Natural Gas Impact

Qatari LNG losses total approximately 36 million tons, causing significant market disruption. Cheaper Middle Eastern LNG is now flowing to Europe, threatening winter storage preparations.

Technical Outlook

• Natural Gas: Trading at $2.91 with resistance at $2.95 and support at $2.84
• WTI Crude: At $100.65 after breaking below $101.00 support; next support levels at $98.49-$95.33
• Brent Crude: Trading at $103.86, falling below $105.94 support and the 200 EMA

Market Outlook

Analysts maintain a moderately bullish stance across crude oil, natural gas, and natural gas liquids, though growing vulnerabilities limit the market's ability to absorb further disruptions.