The Organization of the Petroleum Exporting Countries (OPEC) has reported a record‑breaking plunge in crude production for March, as the conflict between a U.S.‑Israeli alliance and Iran continues to paralyse key Middle Eastern exporters. OPEC’s secretariat data show that cartel output collapsed by 7.88 million barrels per day (MMbpd) to 20.79 MMbpd in March, marking the steepest decline in records going back to the 1980s.
The report, compiled by the organization’s research department in Vienna, attributes the sharp drop to dramatic output losses in Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait, all hit by the shutdown of the Strait of Hormuz. The strategic waterway has been effectively closed for six weeks, forcing regional producers to cut or shut‑in crude flows, while global prices for jet fuel, diesel, and gasoline have surged, raising fears of renewed inflation and economic disruption.
International benchmark crude futures traded near $102 per barrel in London on Monday, as U.S. President Donald Trump publicly pledged to maintain a blockade on Iranian oil flows from Hormuz and Tehran warned of retaliation. Notably, OPEC’s monthly report makes no direct mention of the Strait’s closure, focusing instead on the numerical impact on member output.
Iraq recorded the largest monthly fall, plunging 2.56 MMbpd to 1.63 MMbpd, closely followed by Saudi Arabia, which dropped 2.31 MMbpd to 7.8 MMbpd. The overall OPEC‑plus production cut even exceeds the 6.28 MMbpd reduction in May 2020, when the alliance slashed output amid the pandemic‑driven collapse in global fuel demand.
Despite the shock, OPEC cut its forecast for second‑quarter world oil demand by 500,000 bpd, while planned increases in the second half of the year left the full‑year demand estimate unchanged. Before the war erupted on 28 February, key OPEC+ members had been gradually restoring production that had been shelved years earlier, and at a 5 April virtual meeting they agreed a modest, symbolic increase in output for May as they prepare for a further policy review in the coming weeks.