Saudi oil output plunges to lowest since 1990 – Bloomberg

The Iran war and Houthi campaign against the kingdom have squeezed export routes as oil prices surge above $100 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.

Read more Houthis claim control of strategic Bab al-Mandeb Strait (VIDEOS) 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-Iran conflict, forcing greater reliance on Red Sea routes.

Iranian-aligned Houthi forces in Yemen have also renewed the war against Saudi-backed government forces and declared a maritime blockade against the kingdom.

The Houthis have 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 the Saudi authorities, although Riyadh has provided few details on the extent of the damage or its impact on production.

Read more Oil tops $100 as Middle East conflict intensifies The Houthis reportedly seized the strategic port city of Mocha on Thursday, tightening their grip on the approaches to the Bab al-Mandeb Strait – the narrow southern entrance to the Red Sea and a critical route for Saudi oil exports.

The group said navigation remains safe for other shipping but not for Saudi vessels.

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.

Read more Russia quietly launches Arctic oil giant: What is Vostok Oil? The mounting threats to both Hormuz and Bab al-Mandeb have sent oil prices surging higher.