Middle East Wars Cut Oil Supply from Saudi Arabia and Russia

The ongoing wars in the Middle East and Ukraine have disrupted oil supply from major producers Saudi Arabia and Russia, pushing Saudi crude supply to its lowest level in over three decades. According to data from the International Energy Agency (IEA), Saudi Arabia's crude supply fell by 2.27 million barrels per day (bpd) in August to around 5.97 million bpd, down from a previous high of over 10 million bpd in February when the US-Iran war began.

The decline was largely due to disruptions to oil flows through the Strait of Hormuz and attacks on Saudi oil facilities, which constrained the country's ability to move crude to global markets. Initially, Saudi Arabia sought to redirect some of its crude exports through the East-West Crude Oil Pipeline to the Red Sea port of Yanbu, but Houthi attacks in the Red Sea subsequently constrained flows along this alternative route.

Russia's oil production also took a hit due to Ukrainian attacks on Russia's energy infrastructure. The IEA reported that Russia's crude oil production fell by 200,000 bpd month on month in August to 8.36 million bpd, its lowest level since 2003. OPEC estimated Russian crude oil production at around 8.72 million bpd, down around 160,000 bpd from July.