Iran's blockade of the Strait of Hormuz has choked Gulf production and upended export routes, prompting OPEC to revise its 2026 global oil demand growth estimate down to 1.17 million barrels a day from 1.38 million barrels a day.
OPEC production has fallen more than 30% since the Iran war began in late February, with Saudi Arabia pumping at its lowest level since 1990
Bloomberg / Getty Images
Iran's blockade of the Strait of Hormuz has choked Gulf production and upended export routes, prompting OPEC to revise its 2026 global oil demand growth estimate down to 1.17 million barrels a day from 1.38 million barrels a day.
According to CNBC, April's output decline of 1.7 million barrels a day came on top of the 7.9 million barrel-a-day collapse recorded in March, bringing the total reduction across OPEC membership to 9.7 million barrels a day, or more than 30%, since hostilities with Iran erupted in late February.
Figures in OPEC's secretariat report, obtained by Bloomberg, show Saudi Arabia's April crude output reached 6.316 million barrels a day — a further decrease of 651,000 barrels a day that pushed production to its weakest point in 36 years, last seen when the Gulf War began in 1990. Riyadh's output has now shed 42% of its pre-war volume. Neighboring Kuwait fared even worse on a relative basis, with April production roughly halved to around 600,000 barrels a day — a figure that represents under a quarter of what the country was producing before the conflict, according to Bloomberg.
The International Energy Agency, in its monthly report released Wednesday, put the total supply shortfall from Gulf producers at over one billion barrels, with the Hormuz closure responsible for knocking more than 14 million barrels a day offline.
Where OPEC still anticipates demand growth, the IEA takes a far darker view: the agency — a Paris-headquartered body focused on energy security for its largely Western membership — forecasts a 420,000-barrel-a-day contraction in global oil demand this year, a drop that according to Bloomberg would be the sharpest since the Covid pandemic year of 2020.
Existing government and commercial reserves have cushioned some of the blow, but the IEA warned the drawdown is happening faster than ever recorded — with stockpiles shrinking by 250 million barrels across March and April, a rate of 4 million barrels a day, according to CNBC.
Not all producers have been left without options. A pipeline linking Saudi fields to Red Sea terminals has allowed the kingdom to keep some crude moving to market, and the UAE similarly holds access to an export corridor that avoids Hormuz, according to Bloomberg. Outside the Gulf region, exporters — led by the U.S. — have ramped shipments to record highs to help fill the gap, according to CNBC.
For 2027, OPEC revised its demand growth outlook upward to 1.54 million barrels a day, compared with its earlier projection of 1.34 million barrels a day.
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