Page 9 - Policy Economic Report - September 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

Economy in Focus

1. A snapshot of the global economy

Global Economic Outlook

The global economy has remained resilient in 2026 despite the economic effects of the conflict in the
Middle East and a sharp increase in energy prices. According to the September 2026 OECD Interim
Economic Outlook, global growth moderated to an annualised rate of 2.6% in the first half of 2026, down
from 3.6% in the second half of 2025. While output fell sharply in economies directly affected by the
conflict, including Saudi Arabia, activity proved more resilient than anticipated across many energy-
importing and energy-exporting economies. The impact of the energy shock was partly cushioned by
additional energy supplies from outside the Gulf, drawdowns of oil inventories, substitution towards
alternative energy sources and discretionary government support measures.

A significant counterweight to the adverse effects of the energy shock has been the continued strength
of artificial intelligence (AI)-related investment and production. In economies such as the United States,
Canada and Australia, investment in data-centre structures and technology equipment contributed to
stronger GDP growth in the second quarter. This investment also generated spillover effects across
economies producing semiconductors, technology equipment and construction-related inputs. Korea and
Japan, as major semiconductor producers, recorded a substantial increase in technology exports, while
China also benefited from developments in the technology sector. In several emerging-market economies,
including India, Indonesia and Brazil, resilient domestic demand and government measures cushioning
households and firms from higher energy costs provided additional support to economic activity.

The resilience of global activity, however, continues to coexist with significant energy-market and
geopolitical risks. S&P Global Market Intelligence's September 2026 Global Economic Outlook points to a
more challenging near-term environment as renewed disruptions to energy production and exports have
pushed oil and gas prices higher. Brent crude prices moved back above US$100 per barrel, with the
average price during the first half of September more than 40% above the early-July low. European natural
gas prices have also risen by more than 30% since late July to above $27/MMBtu, reflecting concerns over
storage levels and potential winter supply shortages. Elevated refining margins arising from production
constraints have added further pressure to energy costs. These developments have increased risks to both
consumer prices and business costs.

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