Saudi Oil Output Plunges to Lowest since 1990

By Al Ahed Staff, Agencies

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

Riyadh told 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 obtained by the outlet.

The figure marks a new low since the US and “Israel” launched strikes against Iran in late February, as well as the kingdom’s lowest production level since the beginning of the Gulf War in 1990.

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 aggression on Iran, forcing greater reliance on Red Sea routes.

Meanwhile, the Yemeni Ansarullah movement have also renewed the war against Saudi-backed government forces and declared a maritime blockade against the kingdom.

The pressure is already visible in shipping data, as provisional tanker tracking compiled by Bloomberg shows Saudi crude exports falling by around a third in August.

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

The mounting threats to both Hormuz and Bab al-Mandeb have sent oil prices surging higher. Brent crude settled 6.3% higher at $107.63 a barrel on Thursday, while West Texas Intermediate jumped to $102.48, with both benchmarks reaching their highest levels since May.

The upheaval is already reshaping global energy flows. Russia launched the first shipment from its massive Vostok Oil project in the Arctic this week, opening a new export route via the Northern Sea Route which Rosneft says could eventually supply the equivalent of around 730 million barrels of oil annually.