Lower 48 oil and gas output faces major disruption due to freeze
Rystad Energy predicts the freeze will continue to cause major disruptions in US onshore oil and gas production as large swathes of the country were hit by a significant winter weather event. Winter Storm Fern, the nation’s first major system in 2026, hit the Lower 48 on 23 January, piling several states with unusually large amounts of snow as frigid temperatures halted road and rail transport and downed power lines. Oil and gas production shut-ins and a spike in gas demand for heating saw natural gas prices surge while supply fell sharply, as indicated by natural gas pipeline data and market intelligence.
Rystad Energy tracks 82 billion cubic feet per day (Bcfd) of flows from interstate pipelines in our North America Gas dashboard. We see an initial loss of about 2 Bcfd from the Bakken, Rockies and the Mid-Continent, followed by a more abrupt drop of 12 Bcfd, primarily driven by the Permian and the broader Gulf Coast region, with losses somewhat limited in Appalachia. In total, we expect the impact could potentially be closer to 20-25 Bcfd given that the Permian and Haynesville regions have more intrastate pipelines, which are not captured in the flow data.
Figure 1 extrapolates this to monthly averages, offering our view on the total impact on January output, based on our initial intelligence of the freeze. Our initial pre-freeze assessment was already down by 1.5 Bcfd compared with our December US Oil & Gas Production Outlook, with January 2026 anticipated to average 104 Bcfd for the Lower 48, excluding offshore Gulf. We see a base case downside impact of 3.3 Bcfd, with the potential for an additional 2.3 Bcfd, primarily driven by a significant curtailment scenario in the Permian similar to Winter Storm Uri in 2021.
For oil, the Lower 48 will likely see a monthly average impact in January of 390,000 bpd – driven significantly by the Permian and PADD 3 more broadly. The impact should be more limited in other oil regions like the Bakken, Rockies and the Mid-Continent. The maximum downside scenario as described above would feature an additional impact of 273,000 bpd.
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