Saudi Oil Production Crashes to 35-Year Low Amid Middle East Conflict
Saudi Arabia's oil production has plummeted to a 35-year low due to disruptions in the Middle East, pushing crude prices above $100 a barrel. The kingdom's crude production fell by approximately 1.9 million barrels per day in August to just 6.238 million barrels per day, according to figures provided to OPEC.
The decline is attributed to intensifying hostilities involving the United States and Iran, which have severely restricted shipping through the Strait of Hormuz. Additionally, Houthi forces in Yemen have escalated their campaign against Saudi-backed government forces, declaring a maritime blockade targeting Saudi Arabia and forcing some operations to halt.
The situation has become even more serious with reports that the Houthis seized the strategic Yemeni port city of Mocha on September 10, potentially giving the group greater influence over approaches to the Bab al-Mandeb Strait. This narrow maritime gateway connects the Red Sea with the Gulf of Aden and is crucial for Saudi Arabia's alternative export route.
The disruption has already reflected in shipping activity, with Saudi crude exports falling by roughly one-third in August. The kingdom appears to have responded by drawing on its oil inventories, but this measure may not be sustainable in the long term.