According to the group’s latest monthly report, total production from OPEC members fell dramatically in March, dropping 27% to 20.8 million barrels per day (bpd), down from 28.7 million bpd in February. The downturn has been driven largely by export disruptions rather than reservoir limitations, as critical shipping routes remain under threat.
Iraq recorded the most severe decline, with output plunging 61% from 4.2 million bpd to just 1.6 million bpd. Kuwait and the United Arab Emirates also experienced major setbacks, with production falling 53% and 44% respectively over the same period. Even Saudi Arabia, OPEC’s largest producer, was not spared, cutting output by 23% to 7.8 million bpd from 10.1 million bpd.
The disruptions stem primarily from the ongoing insecurity in the Strait of Hormuz, a vital corridor for global energy flows. Escalating attacks linked to Iran have significantly reduced tanker traffic through the narrow passage, effectively choking off export capacity for Gulf Arab states.
In response, Saudi Arabia has leaned heavily on its East-West pipeline, a strategic route designed to bypass the Gulf by transporting crude to the Red Sea. However, even this alternative has come under strain. A recent attack attributed to Iran reduced the pipeline’s operational capacity by approximately 700,000 bpd, further tightening supply.
Despite the widespread disruption, industry leaders suggest that production capacity itself remains largely intact. Sheikh Nawaf al-Sabah, CEO of Kuwait Petroleum Corp., indicated that output recovery could begin relatively quickly once conditions stabilize. While some volumes could return within days, full restoration may take up to three or four months.
Iran’s own production has been less severely affected, declining by about 5% to 3.06 million bpd. The country has continued exporting oil through the strait during the conflict, although its position may soon become more precarious.
Following unsuccessful negotiations with the United States, tensions escalated further as Donald Trump ordered a naval blockade targeting Iranian ports. The directive, enforced by the U.S. Navy, aims to halt maritime traffic in and out of Iran, adding a new layer of uncertainty to already strained global supply chains.
Oil markets have reacted swiftly to the tightening supply outlook. U.S. crude futures for May delivery have surged past $100 per barrel, with subsequent contracts and global benchmarks, including Brent crude, hovering around similar levels.
As geopolitical risks continue to mount, the outlook for global energy markets remains volatile, with supply constraints in the Gulf region likely to exert upward pressure on prices in the near term.