Texas natural gas prices fell to negative $9.75 per unit this week as local supply overwhelmed available pipelines. This price collapse occurs while Europe and Asia face energy shortages and rising costs caused by the U.S. war with Iran. Families in Asia now face power rationing while Texas drillers burn off excess fuel they cannot sell.
Texas gas prices hit record lows at the Waha trading hub
Spot prices at the Waha gas trading hub in West Texas dropped to negative $9.75 per million British thermal units (a standard measure of heat content in fuel) last week. Traders told Bloomberg they expect prices to hit negative $10 later this year. Texas drillers (Actor) produced (Action) excess gas (Object) in March 2026 (Date) at the Waha hub (Location) because they lacked enough pipes to move it.
Negative prices mean producers must pay other companies to take the gas away. Because they cannot store or move the fuel, companies are burning it into the air. These burning events, known as flaring, reached a five-year high this month. This happens even as the rest of the world struggles to find enough fuel to keep factories running.
Oil profits keep gas pumps running in the Permian Basin
The Permian Basin in West Texas produces both oil and natural gas from the same wells. Drillers focus on oil because it is easy to transport through an existing network of pipelines. Natural gas requires different pipes, and the region does not have enough of them to handle the current record production levels.
Oil prices have jumped 47% to nearly $100 a barrel since the U.S. war with Iran began three weeks ago. These high oil profits allow companies to keep drilling even if they lose money on the gas they produce. Companies treat the gas as a waste product rather than a valuable resource because the oil pays for the entire operation.
War in Iran cuts off 20 percent of global energy supply
The war has caused a massive supply gap in the global energy market. Iran responded to U.S. actions by closing the Strait of Hormuz, a narrow water path where 20% of the world's oil and liquefied natural gas (gas cooled into liquid for shipping) passes. This blockage prevents fuel from reaching buyers in Europe and Asia.
Iran also launched attacks on Qatar’s Ras Laffan Industrial City, a major fuel production site. These attacks damaged two production lines, which will cut Qatar's exports by 17%. Experts believe it will take five years to repair the damage to these facilities. This loss of supply forces countries to compete for whatever fuel is left on the market.
Asian nations return to coal and shorter workweeks
Energy costs in Europe jumped 35% on Thursday to roughly $20 per unit, which is double the price seen before the war. While this is lower than the record highs seen in 2022, it makes restocking winter supplies difficult. In Asia, the situation is more severe, leading governments to take drastic steps to save power.
Several countries have introduced new rules to lower energy use:
- Thailand ordered all coal-fired power plants to run at 100% capacity to replace expensive gas.
- Bangladesh increased coal use to prevent total blackouts in major cities.
- South Korea and Taiwan signaled they will rely more on coal to keep semiconductor factories running.
- Some Asian governments are testing four-day workweeks and mandatory work-from-home orders to save electricity in office buildings.
Supply shocks threaten global manufacturing hubs
Henning Gloystein, a director at Eurasia Group, stated that Asia is now in a "full price competition" for fuel. If the Strait of Hormuz remains closed for six months, gas prices in Asia could rise from $26 to over $40 per unit. This would make it too expensive for many factories to operate profitably.
There is also a risk that high prices will push more countries back to dirtier fuels. The move toward coal in Thailand and Bangladesh reverses years of environmental progress. High energy costs also threaten the production of computer chips in South Korea, which could lead to a global shortage of electronics and cars later this year.
Maintenance and summer demand will drive prices further apart
Pipeline operators in Texas plan to start seasonal maintenance later this year, which will close even more paths for gas to leave the state. This will likely push Texas prices deeper into negative territory. At the same time, European countries must buy large amounts of gas this summer to fill their storage tanks before next winter.
Natural gas prices at the Waha hub in Texas fell to negative $9.75 per unit in March 2026 because limited pipeline capacity trapped local supply while the U.S.-Iran war caused energy shortages and price spikes in global markets. This gap between Texas and the rest of the world will likely grow until new pipelines open or the war ends. No new major pipelines are scheduled to finish construction in the next six months.
Key Numbers and Facts
The confirmed figures behind this story at a glance.
Key Fact Detail Main trading hubWaha Hub, West Texas Texas gas price-$9.75 per MMBtu Date of record lowMarch 2026 Oil price increase47% in three weeks Global oil priceNearly $100 per barrel European gas price$20 per MMBtu (70 euros/MWh) Qatar export loss17% of total LNG exports Next confirmed stepSeasonal pipeline maintenance in Texas
A broken map of energy distribution
The current energy crisis proves that having a surplus of fuel is useless if you cannot move it to the people who need it. Texas drillers are literally burning money because they lack the pipes to reach a world that is desperate for power. This divide creates a strange reality where one part of the world has too much energy to handle while the other part returns to the 19th-century use of coal to keep the lights on. The physical limits of pipelines are now just as influential on global politics as the war itself.
Frequently Asked Questions
Why are natural gas prices negative in Texas?
Prices are negative because there are not enough pipelines to carry the gas out of West Texas to buyers. Drillers produce gas as a byproduct of oil mining, and since oil is very profitable, they keep pumping even when they have to pay people to take the gas. This creates a local glut that forces prices below zero.
How does the war in Iran affect gas prices in Asia?
The war has blocked the Strait of Hormuz, which is the main path for ships carrying fuel from the Middle East to Asia. Additionally, attacks on production sites in Qatar have reduced the total amount of gas available for sale. With less fuel available, Asian countries must pay much higher prices to outbid Europe for the remaining supply.
What is flaring and why is it increasing?
Flaring is the process of burning off excess natural gas at the well site instead of capturing it for sale. It is increasing in Texas because producers have no way to transport the gas to market and cannot store it. This practice has reached a five-year high because production is rising while pipeline space remains limited.
