Crude oil production among major Gulf Arab exporters plummeted in March, primarily due to escalating tensions from the Iran war, as reported by OPEC. Iraq experienced the most significant decline, with output dropping 61% from 4.2 million barrels per day (bpd) in February to just 1.6 million bpd. Kuwait and the UAE also saw substantial reductions of 53% and 44%, respectively, while Saudi Arabia’s production fell 23%. The attacks on critical infrastructure, including a key East-West pipeline, have severely hampered export capabilities through the Strait of Hormuz.

This production collapse has led to a 27% month-over-month decline in OPEC’s overall output, now at 20.8 million bpd. The disruptions have driven U.S. crude oil futures above $100 per barrel, reflecting heightened market volatility and supply concerns. The geopolitical landscape is further complicated by U.S. Navy orders to block Iranian maritime traffic, which could exacerbate supply constraints.

Market professionals should closely monitor these developments, as prolonged production challenges could sustain elevated oil prices and impact inflationary pressures across various sectors.

Source: cnbc.com