The Middle East’s Largest Oil Producers Cut Output by a Third Because of the Strait of Hormuz Blockade

Oil production cuts in the Middle East are deepening, reducing global supply by roughly 6% as the strategically vital Strait of Hormuz has effectively been brought to a standstill.

Four of the region’s largest producers—Saudi Arabia, Iraq, the United Arab Emirates and Kuwait—have lowered their combined output by about 6.7 million barrels a day, according to people familiar with the matter, who asked not to be identified because the information is confidential.

The war, now in its second week and drawing in more than a dozen countries, has led to the effective closure of the region’s main export route. As a result, storage facilities are rapidly filling up and production is being forced lower.

“While we have faced disruptions before, this crisis is by far the largest the region’s oil and gas industry has ever encountered,” Amin Nasser, chief executive of Saudi Aramco, said during an earnings call.

The cuts implemented by the four countries represent the most visible supply response since the war began. Taken together, they amount to a reduction in production of roughly one-third.

Amid the chaos and supply disruptions, oil prices approached $120 a barrel on Monday. They later retreated, however, after U.S. President Donald Trump suggested the war could soon come to an end.

Saudi Arabia has reduced output by 2–2.5 million barrels a day, according to the sources, while the United Arab Emirates cut production by 500,000–800,000 barrels, Kuwait by about 500,000 barrels, and Iraq by roughly 2.9 million barrels a day.

“The disruptions have triggered a serious chain reaction not only in shipping and insurance—their effects are spreading to aviation, agriculture, the automotive industry and other sectors,” Mr Nasser said. “The longer this crisis persists, the more catastrophic the consequences will be for the global oil market—and the heavier the blow to the world economy.”

He declined to comment on the current level of production during the call.

The steepest cuts in relative terms have fallen on Iraq—nearly 60%. Output reductions in Saudi Arabia, the UAE and Kuwait amount to roughly 20–25% from February levels, according to data compiled by Bloomberg.

“Amid the current geopolitical crisis, global inventories—which are already at a five-year low—will decline even faster,” Mr Nasser said. “Most of the world’s spare capacity is concentrated in this region, which makes the resumption of shipping through the Strait of Hormuz critically important.”