Saudi Arabia: Oil output falls in July
Latest reading: Saudi oil output was 7.35 million barrels per day (mbpd) in July, decreasing 22.2% year on year (June: 6.76 mbpd; down 27.7% yoy). Despite the monthly increase, output remains roughly 30% below pre-Middle East conflict levels. Double-digit year-on-year contractions have persisted since March, with April hitting the lowest production level since the 1991 Gulf War.
Outlook: While regional instability will drive down Saudi Arabia’s 2026 oil production outlook, the country’s energy sector has remained significantly better insulated than most other Gulf states. Redirecting crude flows through Yanbu has helped soften the blow of the Strait of Hormuz blockade while taking advantage of record-high prices.
That said, the re-escalation of the U.S.-Iran conflict signals prolonged disruptions in the Strait of Hormuz, delaying a potential full recovery in oil exports. Furthermore, Houthi drone and missile strikes damaged and forced the shutdown of Aramco’s Jazan refinery for much of August, while targeted tanker attacks by the Houthis threaten a shipping embargo near the Bab el-Mandeb Strait. To dodge these threats, vessels loading at Yanbu are routinely turning off their trackers, creating opaque “dark voyages” that obscure real export volumes for traders. With escalating maritime risks pushing the route to its limit, Asian refiners are now asking Saudi Arabia to deliver crude outside the high-danger zone.