Aramco oil tanks are seen at Saudi Aramco’s Shaibah oil field production facility in an empty area of Saudi Arabia.
Ahmed Jadala | Reuters
Crude oil production in major Gulf Arab exporters fell sharply in March due to the Iran war, according to data released by OPEC on Monday.
Iraq was the hardest hit, with production dropping 61% from 4.2 million barrels per day in February to 1.6 million barrels per day in March, according to OPEC’s monthly report. According to the data, production fell by 53% in Kuwait and 44% in the United Arab Emirates month-on-month.
Production in Saudi Arabia, OPEC’s biggest producer, fell 23% from 10.1 million barrels per day to 7.8 million barrels per day. Saudi Arabia relies on a vital east-west pipeline to reroute barrels from the Persian Gulf to the Red Sea for export.
However, the pipeline, which has a capacity of 7 million barrels per day, was recently attacked by Iran. The attack reduced the pipeline’s capacity by 700,000 barrels a day, according to the state-run Saudi Press Agency.
Overall, OPEC production fell 27% month-on-month from 28.7 million barrels per day to 20.8 million barrels per day.
Gulf Arab states have cut back on production because they are unable to export through the Strait of Hormuz due to the war. The Iranian attack has sharply reduced tanker traffic through the narrow sea route that connects the Gulf to global energy markets.
Sheikh Nawaf Al Sabah, CEO of Kuwait Oil Corporation, said it would take months for the Gulf Arab state to return to full production capacity.
“We have resilient reservoirs that will allow us to draw significant amounts of production very quickly, within days,” the CEO said on March 24 at S&P’s global conference, CeraWeek.
Meanwhile, according to OPEC, Iran’s production decreased by about 5% compared to the previous month, from 3.24 million barrels per day to 3.06 million barrels per day. The Islamic Republic continued to export through the strait during the war.
But Iran now faces a blockade after peace talks with the United States over the weekend failed to reach an agreement. President Donald Trump ordered the U.S. Navy to shut down all maritime traffic to and from Iranian ports starting at 10 a.m. ET on Monday.
usa crude oil Futures prices for May delivery are above $100 per barrel, and the U.S. contract for June delivery is $94 per barrel. global benchmark, brent crude oilThe June contract was trading around $100 per barrel, while the July contract was trading at $93.93 per barrel.
