Hormuz Strait Crisis: Gulf Oil Production Plummets 7 Million Barrels Daily
Escalating armed conflict in the Middle East has triggered severe disruption to the global energy sector. International petroleum research firm Argus reports that oil production in the Persian Gulf region has collapsed dramatically by nearly 7 million barrels per day (bpd) due to the crisis paralysing the strategically vital Strait of Hormuz shipping route.
This represents a direct consequence of the de facto blockade of the Strait of Hormuz following combined United States and Israeli strikes against Iran in late February 2026. The closure of this critical logistics corridor has forced major producing nations including Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, and Bahrain to implement drastic production cuts.
According to Argus, further production restrictions are now unavoidable. Oil storage facilities (tanks) in Gulf states have reached maximum capacity in a short timeframe due to halted export flows through maritime routes.
In aggregate, Gulf nations have reduced output by between 6.2 and 6.9 million bpd compared with normal production levels in February 2026. The impact on major oil producers is as follows:
Saudi Aramco, the world’s leading oil company, has reportedly suspended operations at several strategically important offshore fields including Safaniya, Marjan, Zuluf, and Abu Safa. Argus estimates Saudi Arabian production has fallen by approximately 2 to 2.5 million bpd.
Iraqi oil production, which stood at 4.42 million bpd in February, has plummeted sharply to 1.5–1.7 million bpd by 8 March 2026. This figure is projected to fall further to 1.2 million bpd should the crisis persist.
Kuwait Petroleum Corporation (KPC) has formally declared force majeure status regarding crude oil shipments. Kuwait’s production has fallen from 2.59 million bpd to just 2 million bpd, with projections indicating further decline to 1.5 million bpd.
Although the UAE’s ADNOC has attempted to utilise alternative export routes, Argus data shows Emirates production has nonetheless declined to 2.7–3 million bpd from the previous 3.53 million bpd. Meanwhile, Bahrain through Bapco has also declared force majeure at its 405,000 bpd refinery.
The energy crisis stems from combined air strikes launched by the US and Israel against Iranian territory, including the capital Tehran, on 28 February 2026. The strikes caused critical infrastructure damage and loss of life.
In response, Iran launched retaliatory strikes against US military bases throughout the Middle East and Israeli territory. This military escalation subsequently triggered the blockade of the Strait of Hormuz, closing access for tanker vessels carrying global energy commodities.
As of the publication date, there are no indications of de-escalation in the region, whilst global energy markets remain deeply concerned about future oil supply stability.