The OPEC reported this Monday that its production fell in March by almost 8 million barrels per day (mbd), 27.5% less than what was pumped in February, due to the war in Iran and the blockade of the Strait of Hormuz, which mainly affected Iraq and the countries of the Persian Gulf.
The figure, calculated by independent institutes, included in the March monthly report of the Organization of the Petroleum Exporting Countries (OPEC), reflects the impact of the first month of the war started against Iran on February 28 by the United States and Israel.
The report notes that “the events east of Suez”, an allusion to the Hormuz blockade and Iranian attacks on oil industry facilities in countries in the region, caused a drastic drop in supplies from Saudi Arabia, Kuwait, the United Arab Emirates, Iraq and, to a lesser extent, also from Iran, while Venezuela slightly increased its pumping.
According to these calculations, Iraq was the most affected, as its extractions sank to 1.62 mbd, 2.5 mbd less than in February, while Kuwait fell to less than half, going from 2.58 to 1.21 mbd.
Saudi Arabia stopped supplying 2.3 mbd (10.1 mbd in February, 7.8 mbd in March) and the United Arab Emirates subtracted 1.5 mbd (3.4 mbd in March, 1.9 mbd in February).
Much smaller is the loss of Iranian barrels, estimated at 0.18 mbd (3.2/3.0 mbd), as well as that of five other OPEC partners, with Venezuela and Nigeria being the only ones that increased their production a little: by 0.79 mbd, up to 9.88 mbd, Venezuela, and by 0.22 mbd, up to 7.8 mbd, Nigeria.
In total, OPEC production as a whole fell from 28.6 mbd to 20.7 mbd between February and March.
The price of a barrel used as a reference by OPEC, a basket of twelve qualities of crude oil, one for each member country, reflected these cuts with strong increases, to a peak of $146 on March 19.
The monthly value stood at 116 dollars, 48 dollars more than the February average, according to OPEC.
As for the ten allies of the group, Bahrain was also affected, with a drop by half, from 152,000 to 74,000 barrels per day, unlike the rest, which show little monthly variations, except for an increase of 254,000 bd from Kazakhstan.
The OPEC+ group (OPEC and allies, including Russia) saw its output drop from 42.75 to 35 mbd, the second largest reduction in the history of the group, since the 10 mbd voluntarily applied in 2020 to stop the collapse in oil prices caused by the covid pandemic.
This Monday’s report does not include data for April or the implications of the fragile ceasefire and the closure of Hormuz by the United States to also prevent the departure of ships from Iranian ports after an attempt to close a peace agreement failed.
The document indicates that the situation especially affects the production of crude oil products.
“Global refinery processing rates fell sharply in March, recording the largest monthly decline since April 2020,” says OPEC.
Despite these turbulences, which have skyrocketed the prices of crude oil and its derivative products, OPEC maintains unchanged its one-month forecasts for the growth of the world economy, of 3.1% in 2026 and 3.2% in 2027, and for the increase in demand for the planet’s “black gold”, estimated at 1.4 and 1.3 mbd, respectively.
Of course, for the near future, the oil organization admits that an exacerbation of the situation is expected due to the usual increase in demand for fuel for land and air transport during the summer holiday season in the northern hemisphere, which could lead to higher prices for gasoline, diesel and kerosene for airplanes.
