OPEC cuts oil production to lowest in 36 years due to war with Iran - Bloomberg
At the end of April, the Arab Emirates decided to leave the cartel
OPEC countries have cut oil production to its lowest since 1990, Bloomberg / Unsplash/David Thielen claims
OPEC oil production in April fell to its lowest level since 1990 due to the U.S. war with Iran, which caused severe supply disruptions, Bloomberg writes.
Details
Oil production in the cartel's member countries fell by 420,000 barrels per day to 20.55 million barrels per day, according to a Bloomberg survey. That's a new 36-year low. The drop followed a sharp collapse in March, when OPEC crude production fell by 8.6 million bpd - the highest rate in decades - after the closure of the Strait of Hormuz, the publication notes. The Strait of Hormuz connects the Persian Gulf to the open sea, and before the US-Iran war, about 20% of the world's oil and gas supplies passed through it.
Kuwait recorded the biggest drop in April, with output falling by 470,000 bpd and is now less than a third of the country's pre-war production levels. The state's exports fell to only 22,000 bpd, according to tanker tracking data provided by Bloomberg.
Iran's production fell by 180,000 bpd to 3.05 million amid the U.S. blockade. Since April 13, U.S. military vessels have diverted about 50 merchant ships in the Strait of Hormuz, U.S. Central Command reported on May 4 in social network X.
Context
The disruption of supplies from the Persian Gulf has become the biggest shock for the oil market in history and has already supported the growth of fuel prices, increasing the risks of a new wave of inflation and global recession, writes Bloomberg. At the same time, quotations remain volatile: on May 6, Brent crude oil cheapened by about 10% in the moment, falling below $100 per barrel after news of a possible peace deal between the U.S. and Iran.
The situation with oil production is complicated by the UAE's withdrawal from the cartel as of Ma 1. Over the past few years, the Emirates have expressed discontent over OPEC's restrictions on oil production. OPEC+ countries agreed in early Ma to increase quotas in June by 188,000 bpd, formally continuing the process of restoring production that began before the conflict.
This article was AI-translated and verified by a human editor
