Escalating conflict in the Middle East has sent shockwaves across global energy markets, pushing oil prices as high as $120 per barrel before easing slightly. Major international stock exchanges also faced strong pressure amid mounting uncertainty. The sharp price surge is largely attributed to reduced or suspended oil production from key Gulf-region producers.
11.5 Million Barrels a Day Off the Market
Approximately 11.5 million barrels of oil per day are currently missing from global supply—primarily from Gulf countries either directly impacted by hostilities or unable to export due to the closure of the Strait of Hormuz. Storage capacity worldwide is nearing saturation, compounding supply constraints.
Saudi Arabia: Production Cut by 60%
Saudi Arabia—the world’s second-largest oil producer after the United States and responsible for roughly 11–12% of global output—has slashed production by about 60%, down to 4 million barrels per day from around 10 million before the conflict began.
Iraq: Export Blockade Hits Output
Iraq—the fifth-largest oil producer globally—has seen output fall by 60–70%, dropping from 2.8 million to 1.3 million barrels per day. With no alternative export routes and blocked access through the Strait of Hormuz, the country lacks spare storage capacity.
UAE, Kuwait, Bahrain, and Qatar Also Affected
The United Arab Emirates—the seventh-largest producer—now exports just 1.5 million barrels daily, a 60% decline. Kuwait (10th) and Bahrain (60th) have also seen significant cuts. A full production halt in several smaller producers accounts for an additional 2.5 million barrels lost per day.
Qatar—the sixth-largest oil producer and holder of 20% of the world’s natural gas reserves—has completely suspended oil production.