Crude Pipeline Capacity Becomes the Next Bottleneck in Permian Basin

New pipelines are easing the Permian Basin's natural gas takeaway bottleneck, but crude production is on the rise and could soon fill oil pipelines, creating a new bottleneck.

A review by East Daley Analytics finds that capacity on crude oil pipelines is growing scarce to key downstream markets, potentially constraining the basin's next phase of growth. Spot prices at the Waha hub have traded around $1.80 per MMBtu, a dramatic turnaround from negative prices seen through most of 2026 due to the bottleneck.

The gains at Waha followed the startup of Kinder Morgan's Gulf Coast Express Pipeline compression expansion and the partial start of Energy Transfer's Hugh Brinson line. Additional gas capacity is expected in the fourth quarter from Blackcomb Pipeline and further construction on Hugh Brinson, as well as Eiger Express in mid-2028.

However, because most Permian gas is produced alongside crude oil, limited crude takeaway capacity could ultimately become the more significant constraint on gas growth. East Daley's Jack Weixel notes that the Gray Oak Pipeline and Plains All American's Cactus pipelines are being monitored for capacity, but an incremental 115,000 barrels per day is only a 1.5% increase through 2030.