Hormuz crisis continues to impact supplies, survey shows OPEC crude oil production falls to a new 36-year low

According to the investigation, against the background of ongoing disruptions in the Persian Gulf's crude oil exports due to the war in Iran, OPEC's crude oil production in April further declined to the lowest level since 1990. The investigation shows that OPEC's daily crude oil production in April decreased by 420,000 barrels to 20.55 million barrels, the lowest level in 36 years. The decline in production in Kuwait and Iran was the main reason dragging down overall supply. Previously, with the closure of the Strait of Hormuz in March due to conflicts, OPEC production had decreased significantly by 8.6 million barrels/day, marking the largest drop in decades. This survey is based on vessel tracking data, official information, and estimates from institutions such as Rapidan Energy, FGE NexantECA, Kpler, and Rystad Energy. It is widely believed that the interruption of the Gulf's supply has become one of the most serious impacts on the global oil market in history, pushing up aviation fuel, diesel, and gasoline prices, exacerbating concerns about a new round of inflation and global economic recession. At the same time, progress on diplomatic solutions remains highly uncertain. Influenced by news that the United States may be close to reaching an agreement, London crude oil futures fell by about 7% last Wednesday, showing that market sentiment is still fluctuating sharply. In addition to the supply crisis, OPEC faces new challenges internally. The UAE announced last week that it would withdraw from OPEC, after long-standing disagreements with Saudi Arabia over production quotas. Bloomberg's April survey still includes the UAE's data for the last month before formally exiting, which will take effect on May 1st. Despite the closure of the Strait of Hormuz, OPEC and its allies decided over the weekend to symbolically increase production quotas in June, continuing the previous plan to gradually restore production capacity. However, analysts point out that there is still uncertainty about whether the planned production increases can truly be realized in the current context of restricted transportation and exports. Data shows that Kuwait had the largest decrease in production in April, with daily output decreasing by 470,000 barrels to 800,000 barrels, less than a third of the level before the conflict. According to tanker tracking data, their export volume dropped to only 22,000 barrels/day. Iran became the second largest source of production cuts. In the early stages of the war, Iran maintained exports while restricting other countries' use of the Strait of Hormuz. However, with the United States stepping up its naval blockade, the pressure on its exports has significantly increased. The US Central Command stated that since the blockade was implemented on April 13, the US military had forced around 50 vessels to change course. As a result, Iran's daily crude oil production in April decreased by 180,000 barrels to 3.05 million barrels, further expanding the initial extent of production cuts.