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Saudi Oil Output Hits 35-Year Low as Middle East Conflicts Disrupt Exports — AI-generated representative image: An oil refinery and tanker vessel off the Saudi coast, illustrating disruption to the kingdom's crude production and maritime

Editorial Team

August production fell 1.9 million barrels per day as attacks and blockades squeezed export routes, driving Brent prices sharply higher.

Saudi Arabia's crude oil production plunged by nearly 2 million barrels per day in August to its lowest level in more than 35 years, as conflicts across the Middle East disrupted the kingdom's maritime export routes, Bloomberg reported on Thursday.

Riyadh informed OPEC that production fell by 1.9 million barrels per day last month to 6.238 million bpd, according to the group's monthly report. The figure represents the kingdom's lowest output since the onset of the Gulf War in 1990.

The sharp decline reflects how intensifying regional warfare is constricting two of the world's most critical oil shipping corridors, the Strait of Hormuz and the Bab al-Mandeb Strait, with direct consequences for global energy supplies and consumer prices.

The disruption has already pushed international benchmarks to multi-month highs and sent US diesel prices to record levels, underscoring the immediate economic fallout for markets and households worldwide.

Key Developments

Saudi crude production fell to 6.238 million bpd in August, a decline of 1.9 million bpd, marking the lowest level since 1990.
Iranian-aligned Houthi forces renewed their war against Saudi-backed government forces and declared a maritime blockade against the kingdom.
A missile and drone barrage on Tuesday set Saudi oil installations ablaze and forced some facilities to halt operations, though Riyadh has released few details on the damage.
The Houthis reportedly seized the strategic port city of Mocha on Thursday, tightening control over approaches to the Bab al-Mandeb Strait.
Brent crude settled 6.3% higher at $107.63 a barrel on Thursday, while West Texas Intermediate rose to $102.48, both reaching their highest levels since May.

Background and Regional Conflict

Saudi Arabia has been caught between disruptions on both of its principal maritime export routes. Traffic through the Strait of Hormuz has been severely restricted amid the ongoing US-Iran conflict, forcing greater reliance on Red Sea routes for the kingdom's oil shipments.

That alternative corridor has come under increasing threat as Houthi forces in Yemen escalated operations. The Bab al-Mandeb Strait, the narrow southern entrance to the Red Sea, serves as a critical passage for Saudi oil exports. The Houthis have stated that navigation remains safe for other shipping but not for Saudi vessels.

The production decline marks a new low since the United States and Israel launched strikes against Iran in late February, a campaign that has reshaped regional security and energy logistics across the Middle East.

Production and Shipping Data

Riyadh told OPEC that its "supply to market," which includes crude drawn from storage, stood at 7.122 million bpd, suggesting the kingdom tapped inventories to compensate for reduced output. OPEC's separate estimate based on external secondary sources was substantially higher, placing Saudi output at 7.276 million bpd in August.

Provisional tanker tracking compiled by Bloomberg shows Saudi crude exports falling by around a third in August, reflecting the growing pressure on the kingdom's shipping capacity.

The upheaval is already reshaping global energy flows. Russia launched the first shipment from its Vostok Oil project in the Arctic this week, opening a new export route via the Northern Sea Route that Rosneft says could eventually supply the equivalent of roughly 730 million barrels of oil annually. The United States has separately secured majority control over more than 65 billion barrels of Venezuela's proven oil reserves under an investment deal, with President Donald Trump describing the oil as a "gift" to help replenish America's Strategic Petroleum Reserve.

Current Status and Market Impact

The immediate shock is already reaching US consumers. The national average diesel price surpassed $6 a gallon for the first time on record on Thursday, according to GasBuddy, after rising nearly 60% since the US and Israel launched the war against Iran in late February.

While the additional supplies from Russia and Venezuela could eventually ease pressure on global markets, Saudi authorities have provided few details on the extent of damage to their energy infrastructure or its longer-term impact on production. Further information on the kingdom's output recovery is awaited.