Saudi Arabia reportedly cuts oil output 20% to 8 million bpd amid Iran war
Middle East Gulf oil producers have been forced to halt large volumes of production due to the closure of the Strait of Hormuz, a narrow waterway between Iran and Oman, since the United States and Israel began airstrikes on Iran on February 28. Iran said the world should prepare for oil prices at $200 per barrel.
While Saudi Arabia has been sending more oil to Yanbu on the Red Sea to avoid the Strait, production has fallen to around 8 million barrels per day following the closure of the Safaniya and Zuluf offshore fields, according to one source. Another source said Saudi production had fallen below 8 million barrels per day.
The two offshore fields produce more than 2 million barrels per day of mainly heavy and medium heavy crude oil, while the pipeline to Yanbu receives mostly light crude oil.
State oil giant Saudi Aramco declined to comment.
The drop in Saudi production to 8 million barrels per day is a large drop from February, when Saudi Arabia supplied 10,111 million barrels per day to the market and produced 10,882 million barrels per day. Sources at the time said the production increase in February was a contingency plan in case any US attack on Iran would disrupt supplies in the Middle East.
Middle Eastern Gulf countries, including Iraq, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia, have reduced total oil production by at least 10 million barrels per day, and without a rapid restart of shipping flows, those losses will increase, the International Energy Agency said in a report on Thursday.
