Middle East oil production plunges due to Iran war, OPEC data shows
An Aramco oil tank is seen at the Production facility at Saudi Aramco’s Shaybah oil field in the Empty Quarter, Saudi Arabia.
Ahmed Jadallah | Reuters
Crude oil production by major Arab exporters in the Gulf fell in March due to the Iran war, according to data released by OPEC on Monday.
Iraq was hit hardest, with production falling 61% from 4.2 million barrels per day in February to 1.6 million barrels per day in March. OPEC monthly report. The data showed that production fell 53% month-on-month in Kuwait and 44% in the United Arab Emirates.
Production in Saudi Arabia, OPEC’s largest producer, decreased by 23%, from 10.1 million barrels per day to 7.8 million barrels. The Saudis rely on a key East-West pipeline to reroute barrels from the Persian Gulf to the Red Sea for export.
However, the pipeline with a capacity of 7 million barrels per day was recently attacked by Iran. The attack reduced the pipeline’s capacity by 700,000 barrels per day, according to the state-owned Saudi Press Agency.
Overall, OPEC’s production fell 27% month-on-month, from 28.7 million barrels per day to 20.8 million barrels per day.
Gulf Arab states reduced production because they could not export through the Strait of Hormuz due to the war. Tanker traffic on the narrow sea route connecting the Gulf to global energy markets has decreased due to Iranian attacks.
Kuwait Oil Company CEO Sheikh Nawaf al-Sabah said it will take months for Gulf Arab countries to bring production to full capacity.
“We have durable reserves that immediately put out a large amount of production in a matter of days,” the CEO said at the CERAWeek conference hosted by S&P Global on March 24. “The bulk of this will arrive within a few weeks, and then full production will occur within three or four months.”
Meanwhile, according to OPEC, Iran’s production fell by nearly 5% monthly, from 3.24 million barrels per day to 3.06 million barrels. The Islamic Republic continued to export through the strait during the war.
However, Iran now faces a blockade after a deal was not reached in peace talks with the US over the weekend. President Donald Trump ordered the U.S. Navy to block all maritime traffic entering and exiting Iranian ports starting at 10 a.m. Monday.
US crude oil Futures contracts for May delivery rose above $100 per barrel; The US contract for June delivery was $94 per barrel. global comparison, Brent crude oilIt was trading around $100 per barrel for June delivery, while the July contract was trading at $93.93 per barrel.
