Saudi Oil Output Returns to Prewar Levels, Rising Despite Maritime Attacks

Saudi Arabia’s crude oil production has recovered to levels seen before the Iran war despite shipping disruptions in the Strait of Hormuz and attacks on energy facilities. The rebound underscores the kingdom’s ability to maintain supply even as risks to seaborne transport rise, by using export routes through both the Red Sea and the Gulf.

Saudi Arabia reported to OPEC that it produced an average 10.6 million barrels a day in October, the Financial Times said on November 12. That was the highest level since the war began in late February, when the US and Israel attacked Iran.

October output also exceeded the average for January and February, immediately before the war. Analysts said February production was unusually high because Saudi Arabia had accelerated output and exports ahead of the conflict.

Oil supply from the Gulf was hit hard after the Iran war began. Iran’s assertion of control over the Strait of Hormuz sharply curtailed crude shipments through the waterway.

The Strait of Hormuz is a key maritime route that normally carries about one-fifth of the world’s oil. Major Gulf producers were forced to cut output during the war because they had limited storage capacity and insufficient alternative export routes.

Saudi Arabia, however, restored production by making full use of its existing export channels. The kingdom can ship crude through the Red Sea port of Yanbu and also operates major export facilities in the Gulf.

Saudi Arabia stepped up use of both routes in October to expand exports. Kpler, an energy data analytics firm, said the kingdom’s exports of crude and refined products reached 7.9 million barrels a day in October, the highest since the war began.

The increase is notable because it came as attacks on maritime transport intensified. Assaults spread not only in the Strait of Hormuz but also around the Bab el-Mandeb Strait, a critical chokepoint linking the Red Sea and the Indian Ocean.

The UK Maritime Trade Operations agency counted at least 36 attacks on vessels in waters around the Arabian Peninsula in October. That was the highest monthly tally reported since the Iran war began.

Saudi territory also came under attack. Yemen’s Iran-backed Houthi rebels struck the kingdom’s aviation and energy infrastructure.

Several airports were hit, including the country’s largest airport in the capital, Riyadh. The headquarters of state oil company Saudi Aramco and oil field facilities were also targeted. Even with both production sites and export-supporting infrastructure under threat, Saudi Arabia increased output.

The recovery highlights Saudi Arabia’s ability to sustain oil supply as OPEC’s largest producer and the group’s de facto leader. While other Gulf producers had to curb output after the war began because of limited export routes and storage constraints, Saudi Arabia increased shipments by operating export facilities in both the Red Sea and the Gulf.

The rebound also shows that securing export routes to move crude to overseas markets is as important as production capacity itself. Still, the stability of those routes cannot be considered fully restored, given that maritime attacks have climbed to their highest level since the war began.

The United Arab Emirates also raised production above prewar levels. The UAE stopped reporting its output directly to OPEC after leaving the group in April.

Data from external agencies used by OPEC showed the UAE’s October crude production exceeded 4 million barrels a day, well above prewar levels. The recovery in both Saudi Arabia and the UAE points to a broader rebound in oil supply among the Gulf’s main producers.

The UAE’s production increase is also tied to its decision to leave OPEC. When it announced its departure in April, the country said it wanted to free itself from member production limits and raise output more freely.

By October, production had risen above prewar levels, drawing attention to the UAE’s drive to increase output. Still, because the country no longer reports production directly, the figure is an estimate based on external agency data used by OPEC.

Despite the recovery in Saudi and UAE output, uncertainty over Middle East oil supply remains. Disruptions in the Strait of Hormuz persist, while attacks on shipping near the Bab el-Mandeb Strait and on Saudi energy facilities continue.

Whether the recovery in Gulf oil supply can continue will depend on the stability of major export routes and on Saudi Arabia’s ability to keep its Red Sea and Gulf export facilities operating. A key question is whether Saudi oil exports, which have rebounded to their highest level since the war began, can be sustained as maritime attacks increase.

Kim Ju-wan, Hankyung.com reporter, kjwan@hankyung.com