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 principal 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 represents a new low since the US and Israel launched strikes against Iran in late February and marks Saudi Arabia’s lowest production level since the beginning of the Gulf War in 1990.
The kingdom has been caught between disruptions affecting both of its principal maritime export routes. Traffic through the Strait of Hormuz has been severely restricted amid the ongoing US-Iran conflict, increasing Saudi reliance on routes through the Red Sea.
At the same time, Iranian-aligned Houthi forces in Yemen have renewed their war against Saudi-backed government forces and declared a maritime blockade against the kingdom. The group has also directly targeted Saudi energy infrastructure. A missile and drone barrage on Tuesday set oil installations ablaze and forced operations at some facilities to stop, according to Saudi authorities. Riyadh, however, has provided few details about the extent of the damage or its impact on production.
The pressure on Saudi exports has also intensified around the Bab al-Mandeb Strait, the narrow southern entrance to the Red Sea and a critical route for Saudi oil shipments. The Houthis reportedly seized the strategic port city of Mocha on Thursday, tightening their grip on the approaches to the strait. The group said navigation remained safe for other shipping but not for Saudi vessels.
The disruption is already reflected in shipping data. Provisional tanker tracking compiled by Bloomberg indicates that Saudi crude exports fell by around a third in August, highlighting the growing gap between the kingdom’s production capacity and its ability to move crude through threatened maritime corridors.
Riyadh told OPEC that its “supply to market”, which includes crude drawn from storage, stood at 7.122 million bpd, suggesting that the kingdom used 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 Hormuz and Bab al-Mandeb have meanwhile sent oil prices sharply higher. Brent crude settled 6.3% higher at $107.63 a barrel on Thursday, while West Texas Intermediate rose to $102.48. Both benchmarks reached their highest levels since May.
The disruption is also beginning to reshape global energy flows. Russia launched the first shipment from its massive Vostok Oil project in the Arctic this week, opening a new export route through the Northern Sea Route. Rosneft says the project could eventually supply the equivalent of around 730 million barrels of oil annually.
The United States has also secured majority control over more than 65 billion barrels of Venezuela’s proven oil reserves under a sweeping investment deal. President Donald Trump described the oil as a “gift” that would help replenish America’s Strategic Petroleum Reserve.
While those additional supplies could eventually ease pressure on global markets, the immediate effects of the conflict are already reaching consumers in the United States. 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.
