Brent surges past $105 as Saudi output hits 1990 low

Brent crude futures jumped above $105 per barrel on Thursday as Saudi Arabia reported its oil production had fallen to its lowest level since 1990, compounding supply fears in a market already rattled by the US-Iran conflict and escalating Houthi attacks on Red Sea shipping routes.

Saudi Arabia notified OPEC that its August crude output dropped to roughly 6.2 million barrels per day, according to figures cited by Bloomberg. The kingdom's exports fell to approximately 3.1 million barrels per day in August, down from 5.1 million in July — the lowest level since at least 2013, according to tracking firm Kpler. Brent has risen more than 13% so far in September and is up nearly 70% year-to-date, putting it on track for its biggest annual gain since 2009.bankingnews+1

Houthi Embargo Chokes Saudi Exports

The production collapse stems largely from a "maritime embargo" declared by Yemen's Houthi rebels in late July against Saudi ports, which has discouraged vessel operators and curtailed the kingdom's ability to ship crude. After the outbreak of the US-Iran conflict in late February, Saudi Aramco had redirected oil via pipelines to the Red Sea port of Yanbu, restoring output to roughly 80% of normal levels. But the Houthis' decision to target that alternative route — including strikes on multiple Saudi energy facilities on Tuesday — has now closed off that workaround.pakobserver+1

OPEC+ Output Rises Despite Saudi Decline

Despite Riyadh's sharp contraction, overall OPEC crude production increased by 346,000 barrels per day in August to 24.08 million bpd, with Iraq, the UAE and Kuwait leading gains. Broader OPEC+ output, including former member UAE, averaged 38.06 million bpd, up roughly 297,000 bpd from July.aa+1

OPEC also cut its 2026 global oil demand growth forecast for the fifth consecutive month, lowering it to 380,000 bpd from a previous estimate of 580,000 bpd. For 2027, the group raised its demand growth projection to 2.4 million bpd.ndtvprofit+2

Escalation Risks Keep Markets on Edge

The conflict showed no signs of easing. Iran said Wednesday it had attacked 10 vessels near the Strait of Hormuz after the US struck five Iranian oil tankers, and the Islamic Revolutionary Guard Corps warned it would intensify its response. President Trump indicated the conflict could extend beyond the November midterm elections.pakobserver

Stronger Chinese crude buying has further tightened physical markets, according to ING analysts, potentially magnifying the effect of supply disruptions. With OECD crude stocks still 47.9 million barrels below their five-year average, the market has little cushion against further shocks.ndtvprofit+1