Saudi Arabia told OPEC's secretariat that its crude oil production collapsed to 6.238 million barrels a day in August, the lowest level the kingdom has reported since 1990, as a widening U.S.-Iran conflict and a separate Houthi blockade squeeze the country's export routes from both the Persian Gulf and the Red Sea.
The figure marks a drop of 1.9 million barrels a day from July and undercuts even the wartime low Saudi Arabia had reported in April, according to Bloomberg's review of the OPEC filing. Saudi crude exports fell to roughly 3.2 million barrels a day, the lowest in 13 years — about a third of the kingdom's typical volumes. Notably, OPEC's own secondary-source estimates, compiled from external analytics firms, put August Saudi output closer to 7.276 million barrels a day, a far smaller decline — a discrepancy that underscores how difficult it has become to verify real-time production out of the conflict zone.
Squeezed From Two Coasts
The kingdom's exit routes are under pressure on both sides. Since U.S. and Israeli strikes on Iran began in February, tanker traffic through the Strait of Hormuz — the narrow waterway on Saudi Arabia's eastern flank through which roughly a fifth of the world's oil normally moves — has fallen sharply as Iran's Revolutionary Guard has targeted shipping there. On the kingdom's western side, Yemen's Houthi militia declared a maritime blockade of Saudi Arabia in July and struck Saudi Aramco facilities and a military site near Khamis Mushait on Tuesday, wounding 73 people, according to Al-Monitor's reporting. Riyadh has been rerouting some crude overland through its East-West Pipeline to the Red Sea port of Yanbu to bypass Hormuz, though that workaround does little to help while the Red Sea route is itself under blockade.
The supply loss is a central driver of this week's broader oil rally, which has pushed Brent crude above $107 a barrel and U.S. crude above $100 for the first time since May — a jump some analysts say has been amplified further by the discrepancy between Saudi Arabia's self-reported figures and the market's own supply assumptions. Two other OPEC members, the UAE and Iraq, have separately clashed with the group this year over production quotas, and Venezuela is weighing withdrawal as it reopens to U.S. investment, adding further uncertainty to an alliance already struggling to manage the war's fallout.
Saudi officials have not publicly detailed how long they expect the disruption to last, and neither Hormuz nor the Red Sea route shows signs of reopening fully in the near term. For now, the kingdom that has long acted as the world's swing producer — able to open or close the taps to stabilize prices — finds itself instead at the mercy of a war on its own doorstep.
