Saudi Arabia has begun reducing oil production.

Saudi Arabia reduces oil production due to the blockade of the Strait of Hormuz

Saudi Arabia is forced to reduce oil production volumes due to filled reservoirs amid the de facto blockade of the Strait of Hormuz. This forces the country to seek alternative export routes.

According to Bloomberg, Saudi Arabia, the world’s largest oil exporter, is following the example of its neighbors — the United Arab Emirates, Kuwait, and Iraq — by reducing production. Traditionally, Saudi Arabia produces about 10 million barrels of oil per day, of which approximately 7 million barrels are exported. However, the limited capacity of the pipeline to the port of Yanbu on the Red Sea coast does not allow for compensating the blocked export volumes.

The filling of the reservoirs was a result of the blockade of the Strait of Hormuz, a strategically important waterway through which about 20% of the world’s maritime oil exports pass. Although Iran has not officially taken measures to close the strait, it does not rule out the possibility of doing so in the future. The Iranian Ministry of Foreign Affairs emphasized that tankers fear passing through the strait.

Amidst this, global oil prices have risen, which may have a significant impact on economies, particularly the Ukrainian one, where rising fuel prices could trigger a wave of inflation. Experts believe that the situation is critical and may lead to long-term increases in energy prices.