Gulf Oil Producers Slash Output as Strait of Hormuz Tensions Push Prices Higher
Bloomberg reported on Tuesday that Saudi Arabia, Iraq, United Arab Emirates, and Kuwait have collectively reduced oil production by about 6.7 million barrels per day, nearly one-third of their total output.
According to Bloomberg, Saudi Arabia cut its production by 2 to 2.5 million barrels per day, while Iraq implemented the largest reduction, lowering output by approximately 2.9 million barrels daily. Meanwhile, the United Arab Emirates reduced production by 500,000 to 800,000 barrels, and Kuwait cut around 500,000 barrels per day.
The report said the reductions came after the Islamic Revolutionary Guard Corps announced it had “full control” over the strategic Strait of Hormuz. Ship-tracking data also showed dozens of oil tankers waiting on both sides of the waterway.
The Strait of Hormuz is a critical global shipping route that handles roughly 4.5% of the world’s total trade each year. Amid rising geopolitical tensions and fears of supply disruptions, oil prices surged more than 20% on Monday, reaching their highest levels since July 2022, according to Bloomberg.
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