Top oil exporter Saudi Arabia has cut oil production by some two million barrels per day to around eight million bpd after reducing output from two major offshore fields amid the Iran war, two sources told Reuters.
Middle East Gulf oil producers have had to shut vast volumes of production due to the blocking of the Strait of Hormuz, a narrow waterway between Iran and Oman, since the US and Israel began airstrikes on Iran on February 28. Iran has said the world should prepare for oil prices at $200 a barrel.
While Saudi Arabia is routing more oil to Yanbu on the Red Sea coast to avoid the strait, production is down to around eight million bpd after the Safaniya and Zuluf offshore fields were shut, one source said, declining to be identified by name. Another source said Saudi production was down to below eight million bpd.
The two offshore fields produce over two million bpd of mainly heavy and medium heavy crude, while the pipeline to Yanbu mainly takes light crude.
State oil giant Saudi Aramco declined to comment.
A cut in Saudi production to eight million bpd is a sizeable drop from February, when Saudi Arabia supplied 10.111 million bpd to the market and produced 10.882 million bpd.
The February production boost was a contingency plan in case any US strike on Iran disrupted Middle East supplies, sources said at the time.
The International Energy Agency in a report on Thursday said Middle East Gulf countries including Iraq, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia have cut total oil production by at least 10 million bpd, adding that without a rapid restart of shipping flows these losses were set to increase.
(Reporting by Dmitry Zhdannikov, Yousef Saba and Alex Lawler; Editing by Susan Fenton)
