Newsletters
Saudi Arabia’s state-owned oil company, Saudi Aramco, has started lowering crude production at two oilfields as export disruptions around the Strait of Hormuz begin to affect the kingdom’s ability to ship oil, according to a report.
The reductions come as attacks linked to the ongoing U.S.-Israeli war on Iran have restricted movement through the narrow waterway, a key passage for global oil shipments. The slowdown in tanker traffic has left producers facing logistical constraints that are beginning to pressure storage capacity.
Sources told Reuters that Aramco has already implemented output cuts at two fields, though details about the specific locations and the scale of the reductions have not been disclosed.
Saudi Arabia’s production adjustment comes as several neighboring exporters have introduced similar measures to manage supply flows. The United Arab Emirates, Kuwait and Iraq have begun lowering output to prevent storage facilities from filling up if export disruptions continue.
Bahrain’s Bapco Energies has also declared force majeure on shipments, signaling potential delivery disruptions due to circumstances beyond its control.
While curbing production, Aramco has also taken steps to keep exports moving through routes that avoid the Gulf chokepoint.
Earlier on Monday, the company offered more than 4 million barrels of Saudi crude through uncommon spot tenders while attempting to redirect some cargoes toward the Red Sea port of Yanbu. Shipments loaded there can reach international markets without passing through the Strait of Hormuz.
The tightening supply outlook has pushed energy prices sharply higher.
Brent crude approached $120 per barrel on Monday, leaving prices roughly 50% higher compared with levels at the start of the conflict.
Gas markets also reacted after Qatar halted liquefied natural gas production at its Ras Laffan export complex following drone strikes. The suspension of operations and the declaration of force majeure drove European gas prices above €60 ($69.44) per megawatt hour.
Set as preferred source
Set as preferred source
3 min read
