Saudi Arabia's crude oil production plunged to its lowest level in 36 years after the kingdom reported to OPEC that output fell by 1.9 million barrels per day to 6.238 million bpd in August. The collapse — the steepest single-month drop in Saudi output on record — was driven by cascading disruptions to the kingdom's maritime export routes as the US-Iran conflict intensifies.
The last time Saudi production dipped this low was in 1990, during the Gulf War, when Iraqi forces occupied Kuwait and the kingdom ramped up operations to compensate for lost regional supply. This time, the constraint is not production capacity but the physical ability to ship crude out of the country.
Export Routes Squeezed from Two Sides
Before the US-Iran war began on February 28, Saudi Arabia shipped most of its crude through the Strait of Hormuz, the narrow waterway separating Iran from Oman and the United Arab Emirates. After the US and Israel launched strikes against Iran, the Islamic Revolutionary Guard Corps retaliated by attacking tanker traffic in the strait, forcing Saudi Arabia to reroute exports through its East-West Pipeline to the Red Sea port of Yanbu.
That workaround collapsed in July when Yemen's Houthi rebels — backed by Iran — declared a maritime blockade of Saudi Arabia, attacking vessels in the Red Sea and through the Bab el-Mandeb strait, which connects the Red Sea to the Gulf of Aden. In the past week, only two Saudi oil cargoes passed through Bab el-Mandeb, according to data from maritime analytics firm Kpler cited by the New York Times.
The Houthis have also struck Saudi soil directly. On September 9, the group said it targeted Khamis Mushait and Saudi Aramco facilities in Abha, Najran, and Jizan, wounding 73 people and triggering temporary shutdowns at several sites, according to Saudi authorities. On the same day, the Houthis announced they had retaken the port of Mocha near Bab el-Mandeb from the internationally recognized Yemeni government, further strengthening their control over a critical chokepoint.
Exports and Market Supply
Saudi crude exports fell to 3.2 million bpd in August, the lowest in 13 years, according to Kpler data cited by Al-Monitor. Despite the production decline, Saudi Arabia's total oil supply to the market reached 7.122 million bpd in August — exceeding output — suggesting the kingdom drew down commercial or strategic inventories to maintain deliveries to customers.
The production collapse pushed Brent crude, the international benchmark, to $105.79 per barrel. The price spike reflects not only the Saudi disruption but a broader tightening of global supply as the war continues to reshape flows across the Middle East.
Fracturing OPEC
The production crisis comes at a moment of deep fragmentation within OPEC. The United Arab Emirates left the cartel in May after years of frustration with production quotas that limited its ability to develop new capacity. Iraq, OPEC's second-largest producer, threatened in June to follow suit if not granted a higher quota, though Prime Minister Ali al-Zaidi walked back the threat in July, saying Iraq would seek a fair quota within the group.
Venezuela, holder of the world's largest proven oil reserves, is also weighing an exit as it opens its market to US investment following the arrest of President Nicolas Maduro by US forces in January. President Donald Trump said in August that Caracas would ultimately decide whether to remain in the cartel.
For Saudi Arabia, the world's swing producer and OPEC's most influential member, the dual squeeze of export chokepoints and internal political fractures raises a question the kingdom has not faced since 1990: how to keep oil flowing when every route out is under threat.
Sources
- Al-Monitor, "Saudi Arabia's oil production slumps to lowest in 36 years as war bites," September 10, 2026. al-monitor.com
- Anadolu Agency, "Saudi oil output plunges to lowest since 1990 amid fallout from US-Iran war." aa.com.tr
- TradingEconomics, "Saudi Arabia Crude Oil Production." tradingeconomics.com
