Weekly Oil Market Intelligence

September 28, 2026

Executive Summary

Oil begins the week with the geopolitical premium rebuilding after briefly easing. Brent was trading near $107.75 per barrel and WTI around $94.55 early Monday, September 28, after President Trump rejected Iran’s latest proposal to end the conflict and reopen the Strait of Hormuz. Negotiations are not dead—additional U.S.-Iran contacts are expected this week—but the market is again pricing a meaningful probability that normalization will be delayed. MarketScreener

That said, the physical market is adapting. Preliminary Kpler data indicate Middle Eastern crude exports have recovered to roughly 12.8 million barrels per day in September, the highest since the conflict began, with approximately 7.4 million bpd moving through Hormuz. Saudi Arabia also restarted its East-West Pipeline on September 22, restoring an important route from eastern fields to Yanbu on the Red Sea. Those developments explain why WTI ended last week at $92.41 despite continued geopolitical tension. Amwal Al Ghad

The global balance remains unusually tight beneath that recovery. The IEA said last week that global oil demand has fallen sharply under the weight of high prices, but observed inventories have still declined by approximately 507 million barrels since the war began, including more than 300 million barrels released from IEA-member emergency stocks. Global stocks have been drawing at roughly 2.8 million bpd over the past six months. IEA

The Permian continues to strengthen. Baker Hughes reported 270 active Permian rigs on September 25, up one for the week and 17 from a year earlier, while the total U.S. rig count rose to 599, its highest level since May 2024. More importantly, Primary Vision’s frac-spread count jumped by eight to 195, the strongest weekly increase since early September. The activity data now point to something more meaningful than simply maintaining production: operators are beginning to convert stronger economics into higher completion activity. BOE Report

Market sentiment: bullish but highly event-driven. The near-term upside remains substantial if Hormuz talks fail or Gulf infrastructure suffers another disruption. The counterweight is improving export logistics, rising U.S. production and clear evidence that $90–$100 oil is suppressing demand. This remains a market where the direction of the next $10 move may be determined more by diplomacy and shipping than by reservoir fundamentals.

Global Oil Market

Geopolitics

The most important development this week was the failure—at least for now—of another U.S.-Iran diplomatic effort. Iran submitted a proposal during the U.N. General Assembly that would have addressed the conflict and reopening of Hormuz. President Trump rejected the framework over the weekend, although he subsequently said negotiators would continue discussions. The result was an immediate repricing of supply risk Monday morning. MarketScreener

The strategic picture is more nuanced than the headline suggests. Saudi Arabia restarted the 7-million-bpd East-West Pipeline on September 22 after drone damage had taken the system offline. Saudi exports have also increasingly used Gulf loading points and alternative logistics to maintain volumes. The lesson is important: a constrained Hormuz does not automatically mean the same number of lost barrels each week, because producers, traders and shipping companies are continuously developing workarounds. MarketScreener

Those workarounds remain expensive and vulnerable. Houthi missile attacks on Saudi Arabia last week briefly drove oil approximately 3% higher, and Saudi export infrastructure remains exposed on both the Gulf and Red Sea sides. Even when physical barrels move, higher freight, insurance and security costs are increasingly embedded in the delivered price of crude. MarketScreener

Russia adds another layer of uncertainty. Ukrainian attacks last week again targeted Russian refining infrastructure in Samara and Bashkortostan. The significance is increasingly downstream: Russia may still produce crude, but damaged refinery capacity can tighten diesel and product markets that are already under pressure from Middle Eastern disruption. AP News

Supply and Demand

The global market is effectively adjusting through demand destruction and logistical adaptation at the same time.

The IEA estimates 2026 global oil demand will contract by approximately 2.5 million barrels per day, with the Middle East and Asia accounting for roughly 80% of that decline. Second-quarter demand fell 5.3 million bpd year over year, the first quarterly contraction since the pandemic. Gasoil and petrochemical feedstocks have experienced some of the largest declines. IEA

Yet supply recovery has not been sufficient to rebuild inventories. The same IEA analysis shows observed global stocks approximately 507 million barrels below prewar levels despite massive emergency-stock releases. That is the core reason the market remains vulnerable: demand is falling, but inventories are still being consumed. IEA

The U.S. offers more supply cushion. For the week ending September 18, domestic production remained near a record 13.94 million bpd. Commercial crude inventories rose by 3 million barrels to 426.4 million, approximately 2% above the five-year seasonal average, as refinery utilization declined to 94%. Gasoline inventories fell 1.7 million barrels and distillates fell about 400,000 barrels, leaving product markets tighter than the crude balance alone would suggest. BOE Report

That divergence matters. The U.S. increasingly has adequate crude supply but a less comfortable refined-product cushion. High crude prices can therefore soften if diplomacy improves while diesel, jet fuel and refining margins remain elevated.

Markets

Monday’s rally demonstrates how much geopolitical optionality remains embedded in Brent. Brent rose more than 3% to approximately $107.75, while WTI gained roughly 2% to $94.55 in early September 28 trading. Friday’s settlements were $104.32 for Brent and $92.41 for WTI. Sunday Guardian Live

The roughly $12-per-barrel Brent premium to WTI late last week is strategically significant. It reflects the greater exposure of seaborne international markets to Middle Eastern transportation risk while U.S. crude production remains near record levels. For U.S. producers, that spread improves the relative competitive position of domestic barrels even when outright WTI prices retreat.

The broader lesson is that today's benchmarks are increasingly pricing different risks. Brent reflects global shipping and geopolitical scarcity. WTI reflects a domestic system with record production, adequate storage and direct access to expanding Gulf Coast exports. That distinction is particularly favorable for the Permian.

Major Company Developments

Saudi Aramco is reportedly preparing a major reorganization that would establish gas as a standalone business division alongside upstream and downstream operations. The company is considering ways to monetize portions of the business over time while expanding domestic gas resources and its international LNG portfolio. At the center of the strategy is Jafurah, one of the world’s largest unconventional gas developments outside the United States. EnergyNow

The shift is strategically important. Saudi Arabia’s current oil-export challenges reinforce the value of diversifying both products and routes to market. Gas can displace crude currently burned domestically for power while also creating a separate LNG growth platform.

TotalEnergies and Nigeria’s Amni International also reached final investment decision on an approximately $800 million offshore gas project on September 25. The Ima development is expected to produce roughly 300 MMcf/d at peak and supply the Nigeria LNG Train 7 expansion. The project is another example of international capital migrating toward gas resources with direct LNG market access. MarketScreener Canada

BP, meanwhile, is reportedly evaluating a potential acquisition of Devon Energy’s South Texas assets as part of a renewed effort to expand its U.S. shale portfolio. Reuters reported that BP has been reviewing oil-weighted U.S. assets valued in the roughly $2 billion to $5 billion range. The development reinforces a broader corporate shift back toward traditional upstream investment and scale. MarketScreener

Permian Basin Report

Production Trends

The Permian remains the principal engine behind expected U.S. production growth. EIA’s September outlook forecasts basin crude production averaging approximately 6.8 million bpd in 2026, about 3% above 2025, while U.S. crude production averages a record 13.8 million bpd. Weekly U.S. production has recently been running even higher, around 13.94 million bpd. World Oil

The economics remain compelling despite last week’s WTI decline. EIA cites average Permian breakeven estimates of roughly $69 per barrel in the Midland Basin and $63 in the Delaware Basin. Even at Friday’s $92.41 WTI settlement, much of the basin retains a substantial margin over drilling breakevens. World Oil

The basin is therefore entering an important test of capital discipline. Operators now have ample economic justification to increase activity. The question is how much of the incremental cash will go toward new wells versus shareholder returns, debt reduction, acquisitions and infrastructure.

Drilling Activity

Activity strengthened again during the week ending September 25. The U.S. rig count increased by four to 599, the third consecutive weekly increase and the highest count since May 2024. Oil rigs increased by three to 455, while the Permian added one rig to 270—17 more than a year ago. BOE Report

Completion activity delivered an even stronger signal. Primary Vision’s frac-spread count increased by eight to 195, up from 187 the previous week and 179 a year earlier. That follows several weeks in which rigs were increasing faster than completions. American Oil & Gas Reporter

If that trend continues, it would mark an important change in the Permian operating cycle. Rigs build future inventory; frac crews create near-term production. A sustained move above 195 spreads would make a faster fourth-quarter production response increasingly likely.

M&A and Integration

There was no new multibillion-dollar Permian upstream transaction announced during the past week, but the M&A pipeline remains active.

HighPeak Energy continues to evaluate a potential sale after receiving acquisition interest from an international party. The Fort Worth-based operator controls more than 140,000 acres in the Midland Basin and produced roughly 45,500 boe/d during the first half of 2026. Reuters reported that HighPeak is working with Evercore and Texas Capital Securities to engage potential buyers, although no transaction is assured. World Energy News

That process is worth watching because it provides a useful valuation test for a scaled, oil-weighted Midland Basin position in the current market. The Middle East crisis is increasing the strategic value of production in politically stable jurisdictions, but buyers must still underwrite assets against a price deck well below the current geopolitical spot market.

The larger M&A theme remains unchanged: the basin has moved from acreage aggregation toward cash flow, inventory quality and integration. Recent transactions involving Birch, FireBird, Brazos and Salt Creek all emphasized operated production, contiguous acreage or infrastructure connectivity rather than speculative land accumulation.

Infrastructure and Natural Gas Takeaway

The Permian gas story continues improving. AEGIS reported on September 25 that Waha cash prices had risen for four consecutive sessions, from about $1.70/MMBtu on September 18 to $2.08/MMBtu on September 24. Roughly 4.5 Bcf/d of additional outbound capacity is expected to enter service during 2026, materially reducing the immediate risk of the severe negative pricing seen earlier in the year. aegis-hedging.com

The market is already looking past that relief to the next potential bottleneck. AEGIS identifies spring 2028 as the next period of elevated egress risk before another wave of capacity arrives. That explains why producers and midstream operators are continuing to contract and build pipelines even as current Waha prices improve. aegis-hedging.com

Enbridge’s proposed West Texas Express Pipeline is particularly notable because it would move up to 2 Bcf/d westward from Waha toward El Paso, New Mexico, Arizona and potentially Mexico rather than adding another Gulf Coast route. Its nonbinding open season closed September 25, and the project could enter service in late 2029 if commercial support is sufficient. MRT

That westward option matters strategically. Permian gas demand is no longer solely an LNG story. Power generation, data centers, industrial projects and Mexican exports are creating multiple competing outlets for West Texas molecules.

Pricing Differentials

Waha remains discounted to Henry Hub, but the economics are dramatically better than they were during the first half of the year. Waha cash around $2.08/MMBtu on September 24 compared with Henry Hub around $3.20–$3.25 late last week implies a basis discount of roughly $1/MMBtu rather than the extreme negative realizations experienced earlier in 2026. aegis-hedging.com

That improvement has direct implications for oil production. Higher-GOR wells can now operate with less risk that associated gas destroys the economics of the oil stream or forces curtailment.

Permian crude remains in a much stronger transportation position. The basin has multiple Gulf Coast outlets and direct access to export infrastructure, with no comparable evidence of a near-term crude takeaway bottleneck. The larger pricing signal is now the wide Brent-WTI spread, which makes U.S. light-sweet crude increasingly competitive in international markets.

Notable Company Developments

Enbridge remains one of the most aggressive infrastructure players around the basin. Its proposed West Texas Express gas project follows the recent $600 million Salt Creek Midstream crude-gathering acquisition, which connected Permian wellhead volumes directly into Gray Oak, Cactus II and the company’s Ingleside export terminal. The strategy effectively creates multiple routes from Permian production to domestic and international demand. Enbridge

For upstream operators, the recent HighPeak sale process is equally instructive. An international buyer showing interest in a Midland Basin producer demonstrates that geopolitical instability abroad is increasing the strategic premium attached to U.S. barrels. Stockopedia

The most important operating signal, however, may be the jump in frac spreads. If completion activity continues rising while rigs remain around 270, fourth-quarter production growth could exceed expectations without requiring anything resembling the rig counts of prior shale booms.

What to Watch Next Week

• U.S.-Iran negotiations: further talks are expected after President Trump rejected Tehran’s U.N. proposal. A credible framework for reopening Hormuz would be the clearest downside catalyst for crude. MarketScreener

• Hormuz physical flows: September shipments have recovered materially; whether the improvement continues matters more than political rhetoric.

• OPEC+ on October 4: the seven participating producers are scheduled to meet after holding October output policy unchanged. The central question is whether physical disruptions continue to make quota changes largely theoretical. The Straits Times

• October 1 EIA petroleum report: watch whether U.S. crude inventories continue building as refinery maintenance accelerates and exports fluctuate.

• Permian frac spreads: a second strong weekly increase after the jump to 195 would materially strengthen the case for faster near-term production growth.

• Waha pricing: continued cash pricing above $2 would indicate that new pipeline capacity is producing durable improvement rather than temporary relief.

• HighPeak Energy: any formal sale process or identified bidder would provide a valuable read-through for Midland Basin asset valuations.

• Saudi export infrastructure: East-West Pipeline reliability and Yanbu loadings remain critical to reducing the global dependence on Hormuz.

Bottom Line

The oil market is entering the fourth quarter with more physical supply reaching buyers—but less inventory protection if something goes wrong.

Middle Eastern exports are recovering, Saudi Arabia has restarted its East-West Pipeline, U.S. crude production is near record levels and global demand is weakening. Those forces argue against assuming that $100-plus Brent is permanent. Amwal Al Ghad

At the same time, global inventories have been depleted by more than half a billion barrels since the conflict began, emergency reserves have been heavily drawn, and Hormuz remains politically and militarily unresolved. The market therefore has much less ability to absorb another major disruption than it did six months ago. IEA

The Permian remains one of the strongest beneficiaries of that environment. Production is rising, drilling activity is at its highest level in more than a year, frac activity is accelerating and Waha gas economics are improving as takeaway capacity expands.

For industry executives, the week's clearest takeaway is that U.S. barrels—and particularly Permian barrels—are gaining strategic value not simply because oil prices are high, but because they are produced inside a relatively secure, increasingly well-connected supply system.