Published on 13 January 2026

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MIDSTREAM ENERGY MARKET UPDATE H1 2026

Published on 13 January 2026

2026 midstream insurance outlook shows increased capacity and competitive pricing driven by strong five-year performance. Underwriters from upstream and downstream sectors target midstream opportunities as natural gas solidifies its role as transition fuel with rising consumption and LNG exports.

Midstream industry outlook

The midstream energy market outlook is looking promising, driven by the growing demand for natural gas and the increasing importance of energy security. Natural gas is stepping into the spotlight, showcasing its resilience and growing importance in the global energy mix. The US is expected to hit a record high of 118 billion cubic feet per day by 2026, with consumption soaring to 91.4 billion cubic feet per day this year. Liquefied natural gas (LNG) export capacity is expanding, the transition fuel is further solidifying its global reach.

Infrastructure investors are aggressively targeting oil and gas giants, reshaping the energy landscape with high-stakes pipeline and midstream deals. Private capital continues to enter the market owing to the steady return on capital when compared to conventional Oil & Gas. Natural gas is playing a crucial role as a bridge fuel due to its lower carbon intensity. Hybrid fossil-renewable power plants are emerging as a solution to stabilize grid operations and reduce emissions.

The global oil market is expected to remain oversupplied in 2025, with prices potentially dipping to USD50/barrel in early 2026. In contrast, natural gas prices are forecast to rise through late 2025 and into 2026, averaging USD4 per million British thermal units for 2025 and USD4.90 per million British thermal units in 2026, thus continuing to provide a positive outlook.

Midstream insurance market update

The insurance market for midstream assets in 2026 is anticipated to experience an increase in available capacity, as both the upstream and downstream markets aim to maintain or expand their market share. This shift reflects a growing interest in a segment of the energy insurance market that has demonstrated strong performance over the past five years.

The midstream insurance market is expected to continue softening, with high-quality buyers likely to benefit from low double-digit premium reductions. Despite this, the total capacity of the midstream market remains approximately one-fifth of the upstream market, which is expected to contribute to greater stability in midstream pricing compared to its upstream counterpart.

As 2026 progresses, potential pressures on signings or the introduction of additional capacity into the market could lead to increased pricing competition. This is particularly relevant if the London market faces challenges in retaining its market share against domestic competitors. Buyers of midstream insurance are likely to benefit from cost savings and an expanded range of options in terms of leadership and carrier selection.

Both upstream and downstream underwriters are increasingly viewing midstream assets as an opportunity to mitigate pricing pressures within their respective sectors. Historically, upstream underwriters have been cautious about midstream risks; however, their growing knowledge and confidence in this robust segment of the energy insurance market have led to a shift in perspective.