For midstream investors, short-term volatility in crude oil prices should not be a major concern. The broader focus belongs on oil futures prices, particularly looking out to 2027 and beyond. The futures curve matters directly to midstream infrastructure because it determines how exploration and production companies plan their forward drilling budgets.
Key Takeaways
- WTI crude futures above $80 per barrel through mid-2027 and $70 through mid-2028 create clear financial incentives for domestic drillers to expand production, benefiting midstream.
- Updated EIA projections now expect U.S. crude production to grow 1.8% in 2027 to a record 14.2 million barrels per day (MMBpd), reversing pre-war expectations of a volume decline.
- Midstream ETFs like AMLP and ENFR are positioned to benefit from higher throughput volumes across gathering, processing, and pipeline infrastructure.
Geopolitical Friction Drives the Futures Curve
Geopolitical unrest and conflict in the Middle East continue to disrupt trade channels. Markets now expect these geopolitical pressures to persist until at least early next year. Consequently, markets have priced a substantial risk premium into long-dated energy contracts.
Just a month ago, oil futures curves reflected expectations that crude prices would drop below $80 per barrel before the end of the year and fall under $70 in early 2028. However, recent attempted Iranian strikes on U.S. warships and Houthi militant attacks targeting exports through the Bab el-Mandeb strait, a route that handled ~8% of global oil supply in 2Q26, have shifted prices higher across the entire curve.
West Texas Intermediate (WTI) futures currently hold above $80 per barrel until mid-2027. Prices remain comfortably above $70 per barrel through June 2028. Compared to the start of the year, 2027 futures prices for the U.S. crude benchmark have risen roughly $20 per barrel.
When prices exceed the $70 per barrel threshold, upstream producers gain a clear incentive to increase drilling activity and expand output. Eventually, global markets will need to restock strategic oil reserves, providing further support to long-term futures prices.
Higher U.S. Production Targets Expanding Throughput
This sustained strength across oil futures curves directly affects domestic volume projections. The U.S. Energy Information Administration (EIA) updated its Short-Term Energy Outlook to reflect higher production expectations.
The September STEO revised U.S. crude oil production upward to nearly 14 million barrels per day (MMBpd) for 2026, representing a 0.9% increase from August estimates. For 2027, the EIA projects production to reach 14.2 MMBpd.
These updated numbers reflect a 0.3% annual growth rate from 2025 to 2026, followed by a 1.8% expansion from 2026 to 2027. Middle East supply disruptions have upended pre-war industry expectations for a decline in U.S. production this year.
Capturing Growth via AMLP and ENFR
Investors seeking midstream exposure can look to the Alerian MLP ETF (AMLP ) and the Alerian Energy Infrastructure ETF (ENFR ). AMLP provides targeted exposure to Master Limited Partnerships (MLPs). Meanwhile, ENFR offers broad exposure to North American energy infrastructure companies.
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