Saudi Arabia’s Oil Production Drops Over 40% To Lowest Level In More Than Three Decades: Report
Saudi Arabia informed OPEC that its production of oil dropped more than 40% to its lowest level since 1990, according to a new report.
Bloomberg detailed that the cartel’s monthly report showed that Saudi production fell by more than 650,000 barrels per day, clocking in at 6.316 million barrels per day. It is the lowest figure since the Gulf War in 1990 after Iraq’s invasion of Kuwait.
The country went on to say that it has partially mitigated the impact of the Strait of Hormuz’s closure by rerouting some exports through its east-west pipeline network.
The organization has said that, overall, oil production fell more than 30% since the beginning of the Iran war.
In its latest monthly update, OPEC also lowered its demand growth forecast for the year to about 1.2 million barrels per day, compared to 1.4 million from the last report.
The cartel’s production dropped by 1.7 million of barrels per day. It has plunged by almost 10 million barrels per day since the war began.
Overall, more than a billion barrels of oil have not been produced since the conflict began in late February, according to the International Energy Agency’s latest update. The figure amounts to about 14 million barrels per day.
“With global oil inventories already drawing at a record clip, further price volatility appears likely ahead of the peak summer demand period,” the IEA said. It also noted that the gap between the supply and demand is narrower because the market had a surplus heading into this year, the group noted.
The cartel last week agreed to a modest increase in oil production for June as the group continues adjusting output.
The alliance of Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman confirmed it will raise production by 188,000 barrels a day, slightly below the previous month’s increase. The adjustment was agreed during a virtual meeting focused on global supply conditions and market stability.
The decision is part of a series of voluntary production adjustments first introduced in 2023 and reviewed monthly by participating countries. The group said the latest change reflects continued coordination to manage supply while retaining flexibility to respond to market developments, according to the OPEC statement.
The meeting marked the first OPEC+ decision since the United Arab Emirates exited the group on May 1. The UAE’s departure ended nearly six decades of membership and removed one of the alliance’s largest producers from the coordinated quota system.
