Saudi Arabia: Oil output falls in June
Latest reading: Brent crude oil prices averaged USD 84.49 per barrel in June, down 18.6% from May. On 30 June, the commodity traded at USD 72.94 per barrel, down 20.7% from 29 May.
Turning to production, Saudi oil output was 6.85 million barrels per day (mbpd) in June, decreasing 26.8% year on year (May: 6.95 mbpd; down 24.3% yoy). This marked the second-lowest oil production level since the 1991 Gulf War and the sharpest year-on-year contraction in over five years.
Outlook: While ongoing regional instability has weakened Saudi Arabia’s near-term production outlook—with 2026 output projected to decline year-on-year—the country’s energy sector has remained significantly better insulated than most other Gulf states. By rerouting exports through the Red Sea port of Yanbu, the Kingdom has partially offset losses from the Hormuz blockade while also benefiting from historically high oil prices. However, with renewed strikes and the re-escalation of the conflict signaling prolonged disruptions in the Strait of Hormuz, a full recovery in oil exports will take longer. Furthermore, late-July Houthi drone and missile strikes against Saudi oil tankers in the Red Sea—accompanied by threats to enforce a total shipping embargo near the Bab el-Mandeb Strait—severely endanger the Kingdom’s primary bypass corridor.