OPEC’s crude oil production dropped by 900,000 barrels per day in August to an average of 19.91 million bpd, according to a Bloomberg survey. Saudi Arabia drove this decline, with production falling by just over 1 million bpd to 6.98 million bpd and exports tumbling by nearly one-third to 3.03 million bpd. The drop stems from disruptions to Saudi Arabia’s export routes, including tanker attacks in the Strait of Hormuz and Houthi threats along the Red Sea and Bab el-Mandeb. Iraq and Venezuela partially offset the decline, adding a combined 340,000 bpd through respective increases of 270,000 and 70,000 bpd. The Strait of Hormuz alone handles roughly a fifth of the world’s daily oil consumption, creating a geopolitical risk premium across the entire crude complex.
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