The Gulf's largest oil producer has begun cutting production

Saudi Arabia, the world's largest oil producer in the Persian Gulf and the second largest after the United States, has started to cut production, a source familiar with the situation told Bloomberg. According to him, Saudi Arabia took such a decision due to the actual blockage of the Strait of Hormuz - a narrow water passage off the coast of Iran, through which passes a fifth of all maritime oil transportation. Restriction of shipping through this route has led to the filling of oil storage tanks in the country, Bloomberg writes.

Saudi Arabia, the agency reminds, produces about 10 million barrels of oil per day and exports about 7 million barrels per day. Last week, due to the escalating conflict in the Middle East, Saudi Aramco began diverting some of these supplies from the usual route through the Strait of Hormuz - towards the port of Yanbu in the Red Sea. However, the capacity of the pipeline, which transports oil, is insufficient to fully replenish export volumes, Bloomberg points out.

Last week, the first major exporter in the Middle East to begin cutting oil production was Iraq. On March 3, it announced the curtailment of production at three of its largest oil fields. On March 5, the Financial Times quoted sources as saying that Saudi Arabia has about two more weeks before it, too, will have to cut production because of the filling of storage tanks.

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