Major oil-producing nations in the Middle East are confronting their most severe supply crisis since the outbreak of regional conflict, with collective output reductions from four countries equivalent to approximately 6% of global supply. According to information from informed sources cited by Bloomberg, Saudi Arabia, Iraq, the UAE, and Kuwait have collectively reduced their daily production by up to 6.7 million barrels. This cut represents about one-third of the four nations' total production capacity. The Strait of Hormuz, a critical global energy passage, is currently nearly paralyzed, leading to rapidly filling storage tanks and forced production cuts. Due to this impact, oil prices surged close to $120 per barrel, but later retreated after the U.S. President suggested the conflict might end soon.

Saudi Aramco's CEO Amin Nasser warned during an earnings call that disruptions in the Strait of Hormuz are triggering a chain reaction affecting shipping, insurance, aviation, agriculture, and automotive industries, among others. He stated that if the situation continues to deteriorate, it could have "catastrophic consequences" for the global oil market and world economy. Details of the four nations' cuts: Iraq experiences deepest reduction at 60% According to information from informed sources obtained by Bloomberg, the distribution of this round of production cuts is as follows: Saudi Arabia reduced daily output by 2 to 2.5 million barrels, Iraq by approximately 2.9 million barrels, the UAE by 0.5 to 0.8 million barrels, and Kuwait by about 0.5 million barrels. In terms of percentage reduction, Iraq has been hit the hardest, with its production drop approaching 60%. In comparison, the cuts from Saudi Arabia, the UAE, and Kuwait each represent about 20% to 25% of their respective production levels recorded in February this year. Strait of Hormuz near standstill, export routes blocked The conflict has entered its second week, with more than ten countries now involved. The Strait of Hormuz is the world's most crucial oil transportation chokepoint; prolonged obstruction would directly sever the primary channel for Middle Eastern crude to enter international markets. Nasser explicitly called for the restoration of shipping order in the Strait of Hormuz during the meeting, pointing out that most of the world's spare production capacity is concentrated in this region. He emphasized that "restoring shipping through the Strait of Hormuz is critically important." He also warned that global inventories are already at their lowest levels in nearly five years, and if supply disruptions persist, the rate of inventory drawdown will accelerate further. Oil prices experience sharp volatility as market watches conflict developments This round of production cuts represents the most concrete supply-side response since the conflict began, leading to significant price fluctuations. International oil prices climbed towards $120 per barrel on Monday, but quickly gave up these gains after the U.S. President suggested the conflict might be ending soon. Nasser characterized this crisis as "the biggest crisis the regional oil and gas industry has faced so far," using notably stronger language than in previous geopolitical conflicts. He further emphasized that the disruption's impact on shipping and insurance has already created a serious domino effect, extending to multiple real economy sectors. The market's primary focus remains on the conflict's duration and how quickly normal transit through the Strait of Hormuz can be restored.