Saudi Production Surge, Super El Niño Add Volatility to Global Energy Markets

Saudi Arabia told OPEC that its crude oil production climbed by 26 percent last month to the highest since before the outbreak of the war, according to Rigzone. At the same time, the intensifying 2026-27 “Super El Niño” is projected by the World Meteorological Organization and NOAA to be one of the most destructive climate events in 50 years, a pattern that could reshape global coal markets, OilPrice.com reported.

For North Dakota’s Bakken operators, royalty owners and state energy stakeholders, the two developments point to a more volatile global energy backdrop. The Bakken formation is North Dakota’s primary oil-producing region, and crude oil prices and global supply trends can influence drilling economics and royalty payments.

The Saudi report indicates a major crude producer increased output sharply last month. Higher production from a leading exporter can affect global oil supply and price expectations, though the sources did not provide specific Bakken production, price or rig data for November 2026.

The climate factor enters through coal demand and supply chains. El Niños generally happen every two to seven years and last between nine and 12 months, with the second year often warmer, OilPrice.com reported. A Super El Niño occurs when sea surface temperatures reach at least 3.6 F, or 2 C, above the long-term average. Only three very strong or Super El Niños have been recorded since 1950, and the last occurred in 2015-16.

WMO forecasts a near-100% likelihood that El Niño will persist through February 2027 and could be the strongest ever, raising risks of extreme weather into next year. The WMO, via Reuters, said Pacific Ocean temperatures sampled this year are already more than 2 C above normal. It added that 2027 has the potential to exceed 2024’s record-breaking heat.

El Niño affects global coal usage in contradictory ways. OilPrice.com reported that severe heatwaves and weaker monsoons in India, the world’s second-largest coal consumer, can reduce local hydropower and wind output while spiking air conditioning and cooling electricity demand. That frequently triggers a major surge in coal-fired power generation to bridge the energy gap.

In China, the top coal consumer, El Niño often leads to warmer and wetter winters. Heavier winter rainfall south of the Yangtze River strengthens regional hydropower, which can lower the requirement for thermal coal power generation. The pattern also affects supply: Indonesia, the world’s largest thermal coal exporter, faces drought conditions during El Niño. Low water levels in key inland rivers such as those in Kalimantan restrict coal barge load capacities and slow transport to ports. In parts of Australia, El Niño generally brings drier weather, which can lower the risk of extreme floods washing out open-cut mines and rail lines, according to OilPrice.com.

The sources also noted that most countries are finding ways to reduce coal use as they strive to meet climate commitments, while coal combustion is a leading driver of global warming. For Bakken producers, the direct link is less about coal than about the broader energy market. Shifts in coal demand can alter global energy trade flows and commodity expectations, while changes in OPEC supply can move crude benchmarks that affect oil revenue in Williston Basin fields.

Still, the Saudi production surge and the Super El Niño outlook underline the importance of monitoring weather-driven energy demand and OPEC supply signals as North Dakota operators and royalty owners assess market conditions.