Houthi strikes on Saudi Arabia’s oil infrastructure have alerted the oil markets to the possibility of seeing even less Middle Eastern supply than before, with potential damage to the East-West pipeline jeopardising 3-4 million b/d of Saudi crude exports.
Whilst the meeting of Gulf foreign ministers over the weekend has poured some cold water on runaway crude prices, ICE Brent at $105 per barrel (and available Middle Eastern grades such as Murban and Oman at $120 per barrel) is by no means the limit if the status quo gets protracted.
OPEC Cuts 2026 Demand Forecast Again. OPEC lowered its 2026 global oil demand growth forecast to 380,000 b/d, down by 200,000 b/d from a month ago and marking its 5th consecutive downward revision, in turn boosting its 2027 forecast as the oil group expects a 2.36 million b/d demand recovery.
Houthi Strike Threatens Saudi Arabia’s Hormuz Bypass. Fire and smoke has been seen coming from Saudi Arabia’s 7 million b/d East-West oil pipeline after a suspected strike by Houthi militants, with both Sentinel and NASA satellite imagery showing active fires and thermal anomalies in the area.
Australia Softens Gas Reservation Rules. Australia has watered down its proposed gas reservation policy that set a fixed 20% rate, allowing regulators to lower the reservation rate for LNG plants from 2028, a move designed to allocate as much as 200 BCf per year of additional supply to LNG exporters.
US Diesel Stocks Head for 23-Year Low. US diesel inventories are projected to fall below 100 million barrels for the first time since 2003, while the ElA raised its Q4 2026 diesel price forecast by 14% to $5.55 per gallon, just as current retail prices jumped above the $6 per gallon mark for the first time ever
South Africa Targets 650,000 b/d Refining Revival. South Africa’s Central Energy Fund plans to rebuild the idled Sapref refinery and lift processing capacity to 400,000 b/d, with an eventual target of 650,000 b/d, as the country seeks to reduce fuel imports that now account for 61% of domestic supply.
Europe Gas Hit 44-Month High on Supply Fears. European gas prices surged above €80/MWh for the first time since January 2023 amid concerns that Ukraine’s drone strikes could disrupt LNG output at Russia’s Yamal LNG facility, whilst Qatar extended its force majeure ahead of the winter heating season.
Saudi Output Falls to Lowest Since 1990. Saudi Arabia reported its crude production falling to 6.24 million b/d in August, down 1.9 million b/d from July and the lowest level since 1990, as renewed Houthi-driven disruptions cut exports by roughly one-third and squeezed the kingdom’s export routes.
Bangladesh Locks in Term LNG Cargoes. Bangladesh agreed to purchase 18 LNG cargoes from French major TotalEnergies (NYSE: TTE) for delivery between October 2026 and June 2027 at a premium of $0.06 per MMBtu to JKM, seeking to offset the monthly loss of 570,000 tonnes of contracted Qatari supply.
Asian Refiners Push Aramco to Ditch Dubai. Several Asian refiners asked Saudi Aramco to price 2027 term crude against ICE Brent after Hormuz disruptions shrank deliverable supply to 3-4 million b/d and drove Dubai and Oman about $18 above Brent, reviving concerns over the benchmarks’ reliability.
Mexico Sees 18% Drop in Crude Exports in 2027. Mexico expects crude exports to fall 18% to 426,600 b/d in 2027 from 522,400 b/d this year, as more domestic refining absorbs production and lower oil prices cut projected petroleum revenues by almost 15% to 985 billion pesos ($54.7 billion).
Ukraine Strikes Deep Into Russia’s Arctic Heartland. Ukrainian drones reportedly travelled more than 3,000 km to hit the Urengoy and Purovsky gas condensate processing facilities in Russia’s Arctic, targeting assets linked to Gazprom and Novatek in Russia’s most important natural gas-producing cluster.
Coal Demand to Hit Record High in 2026. The International Energy Agency raised its 2026 global coal demand forecast by 1.2% to a record 8.94 billion tonnes, reversing earlier expectations for a decline as Hormuz oil and LNG supply disruptions drive greater coal-fired generation across Europe and Asia.
Kazakhstan Keeps Pressure on Kashagan. Kazakhstan said it would still pursue a $5 billion environmental case against Kashagan operator NCOC, despite a brief suspension of enforcement during the appeal process, maintaining pressure on the 400,000 b/d field, one of the world’s largest offshore projects.
Iraq Pushes Higher OPEC Baseline. Iraq is seeking an OPEC production baseline of 6 million b/d, up from its current 4.43 million b/d quota, as the group reviews members’ capacities for 2027, raising the stakes for OPEC cohesion after Baghdad previously hinted it could leave the organisation if denied the request.
US Copper Tariffs Face Delay Amid Inflation Concerns. The White House has reportedly decided to postpone slapping tariffs on imported refined copper, potentially up to 15% in 2027 and 30% in 2028, as Trump administration officials turned wary of price risks for domestic manufacturers and consumers.
Oilprice.com
