October 2026 Energy Market Overview
Schrödinger’s Strait: Assessing Supply Risk and Shifting Energy Flows

Overview

This quarter, GLJ has expanded its price forecast coverage to include uranium, copper, gold and silver, reflecting the growing importance of nuclear energy, electrification and critical minerals across global energy and commodity markets.

Global energy markets entered the final quarter of 2026 under the continued influence of geopolitical developments, supply constraints, and shifting trade flows. Through much of the third quarter, oil prices were supported by Middle Eastern supply disruptions, constrained shipping through the Strait of Hormuz, and declining global inventories. By late September, recovering Middle Eastern crude exports and increased flows through Saudi Arabia’s East-West Pipeline began to ease some supply concerns. Concurrently, elevated fuel prices and weaker Asian consumption weighed on global oil demand, partially offsetting the geopolitical risk premium.

North American natural gas markets remain well supplied, supported by strong production, while expanding LNG exports continue to provide structural demand growth. In Western Canada, the recently announced final investment decision (FID) for LNG Canada Phase 2 is expected to provide an additional source of long-term demand for Western Canadian natural gas and further strengthen direct access to Asian LNG markets.

GLJ maintains a fundamentals-based outlook, with our long-term real Henry Hub forecast at US$4.00/MMBtu and long-term real WTI forecast at US$69.00/bbl.

Oil Prices

Oil prices remained volatile through the third quarter. Brent rose in July as regional conflict and maritime disruptions constrained the recovery in Middle Eastern supply, moving above US$100/bbl in late July before easing in August. Prices increased again in September following further disruptions to tankers and energy infrastructure, reinforcing the geopolitical risk premium.

Supply conditions improved towards the end of Q3. According to Reuters, Middle Eastern crude exports recovered to approximately 16.3 million bbl/day in September, although they remained about 3.2 million bbl/day below February levels. Saudi Arabia also restarted its East-West Pipeline in late September, restoring an important alternative route to the Strait of Hormuz. However, shipment transparency has declined materially since the conflict began. The increased prevalence of vessels operating without active tracking systems, together with a rise in ship-to-ship transfers, has limited the transparency of cargo movements, loadings and discharges. As a result, reported export volumes may not fully reflect underlying physical crude flows. Meanwhile, global inventories have declined by approximately 507 million barrels since February, leaving the market with a smaller buffer against further disruptions.

Elevated prices and reduced product availability have also weighed on demand. In its September Oil Market Report, the IEA now expects global oil demand to decline by approximately 2.5 million bbl/day in 2026, with much of the weakness concentrated in Asia, before recovering in 2027. At the same time, production growth from the Americas and recovering Middle Eastern supply should gradually improve availability.

Near-term prices are expected to remain sensitive to geopolitical developments and low inventory levels. As regional supply recovers, some of the geopolitical risk premium embedded in Brent could unwind. Over the longer term, GLJ continues to expect broadly balanced oil markets, supporting our long-term real WTI forecast of US$69.00/bbl.

Natural Gas

North American natural gas prices remained subdued through the third quarter, despite strong summer power demand. Henry Hub spot prices averaged US$2.93/MMBtu from June through August, as record production and ample inventories limited upward price pressure. The EIA now forecasts Henry Hub to average US$3.43/MMBtu in 2026.

Strong supply continues to weigh on prices, with U.S. dry gas production expected to reach a record 111.7 Bcf/day in 2026. At the same time, LNG exports continue to provide structural demand growth, with U.S. exports forecast to increase from 15.1 Bcf/day in 2025 to 17.4 Bcf/day in 2026 as new liquefaction capacity ramps up.

In Western Canada, LNG Canada Phase 2 reached FID in late September, reinforcing the longer-term outlook for growing natural gas demand from the Western Canadian Sedimentary Basin. The expansion will add 14 million tonnes per annum (mtpa) of LNG export capacity, doubling the facility’s total capacity to approximately 28 mtpa, with commercial operations targeted for the early 2030s. In the near term, strong production and ample supply continue to weigh on AECO prices, while expanding West Coast LNG capacity is expected to gradually tighten regional balances and diversify market access.

GLJ continues to view North American gas markets as well supplied in the near term, while growing LNG exports provide an increasingly important source of demand over the longer term, supporting our long-term real Henry Hub forecast of US$4.00/MMBtu.

Global LNG

Global LNG markets tightened through the third quarter. Two damaged LNG trains at Qatar’s Ras Laffan complex, representing approximately 12.8 mtpa or 17% of Qatar’s LNG capacity, could take several years to repair, while QatarEnergy has extended force majeure on deliveries to several customers into the winter. Qatari LNG tanker traffic through the Strait of Hormuz increased in late September but remains constrained.

International prices rose in response. Asian JKM prices climbed into the high-US$20s/MMBtu in September, from below US$10/MMBtu at the beginning of the year, while European prices moved closely with Asian benchmarks as the two regions competed for flexible cargoes.

The disruption has reinforced the importance of supply diversification. U.S. LNG exports averaged 17.4 Bcf/day in the first half of 2026 and are expected to remain near that level through the remainder of the year, while new North American liquefaction capacity continues to ramp up. Near-term prices will remain sensitive to winter demand, Middle Eastern supply, and shipping conditions. Over the longer term, expanding liquefaction capacity should improve market balance, liquidity, and supply diversification.

Expanded Commodity Forecasts

GLJ has added uranium, gold, silver, and copper to our price forecast suite, extending our coverage beyond traditional energy commodities and reflecting the increasing relevance of metals and minerals across energy, electrification, and investment markets.

Uranium prices remained elevated through the third quarter, with spot prices near US$90/lb in September and long-term contract prices reaching a nominal record of approximately US$96.50/lb. Reactor life extensions, new nuclear development, and growing electricity demand are strengthening the long-term demand outlook, while concentrated production and lengthy mine development timelines constrain the supply response.

Copper continues to benefit from investment in power grids, renewable generation, electric vehicles, and data centres. Prices reached record levels in September, with LME copper trading above US$14,800/tonne. Long-term demand growth faces supply constraints, including declining ore grades, mine disruptions, and long project development timelines.

Gold and silver extend GLJ’s coverage into precious metals. Gold is supported by central bank purchases and investment demand but remains sensitive to interest rates and the US dollar. Silver shares these investment characteristics but adds substantial industrial demand from solar, electronics, and electrification, while constrained mine supply continues to contribute to a structural market deficit.

Together, these additions broaden GLJ’s ability to assess price relationships across energy, metals, and macroeconomic markets.