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Friday, Mar 13, 2026

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Saudi Arabia Cuts Oil Output by About Twenty Percent as Iran War Disrupts Gulf Energy Flows

Production reduced to roughly eight million barrels per day as conflict and shipping risks in the Strait of Hormuz force the kingdom and other Gulf producers to curb supply
Saudi Arabia has reduced its oil production by roughly twenty percent, lowering output to about eight million barrels per day as the expanding war involving Iran severely disrupts energy exports across the Persian Gulf.

The production cuts come as tanker traffic through the Strait of Hormuz, one of the world’s most critical energy chokepoints, has been sharply curtailed due to security threats and military activity in the region.

The narrow waterway normally carries about a fifth of global seaborne oil shipments, making it a vital artery for international energy markets.

With shipping through the strait slowed to a fraction of normal levels, Saudi authorities have been forced to reduce production as storage facilities rapidly fill and export routes become constrained.

The kingdom has simultaneously increased efforts to divert crude shipments through alternative infrastructure, including pipelines and ports along the Red Sea.

Energy market analysts say the reduction represents one of the most significant immediate supply adjustments by the world’s largest oil exporter since the crisis began.

The decision is aimed at stabilising domestic operations while avoiding the need to halt production at major oil fields if export capacity remains restricted.

The disruption is part of a broader shock to global energy markets triggered by the conflict between Iran and a coalition led by the United States and Israel.

Missile and drone attacks across the region, alongside heightened military patrols and warnings to commercial vessels, have made large parts of the Gulf increasingly dangerous for shipping.

Several Gulf producers, including Iraq, Kuwait and the United Arab Emirates, have also lowered output as the crisis has intensified.

Combined reductions across the region have removed millions of barrels per day from global supply, adding volatility to already strained energy markets.

International energy agencies warn that the war has created one of the most severe disruptions to oil supply in modern history.

Estimates suggest global output could fall by several million barrels per day if the Strait of Hormuz remains largely inaccessible to commercial shipping.

Saudi Arabia has sought to maintain supply to key customers by drawing on stored crude and expanding shipments through western export terminals connected by the kingdom’s east-west pipeline.

However, industry officials caution that these measures cannot fully compensate for prolonged disruption to Gulf shipping routes.

The production cut highlights the strategic importance of the Gulf’s energy infrastructure and underscores how the conflict has quickly become a major test for global oil markets, with prices and supply expectations shifting as the situation continues to evolve.
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