Largest Single-Month Decline in History! OPEC March Output Plummets by 7.88 Million Barrels Per Day, Exceeding Pandemic Low

OPEC crude oil production recorded the largest single-month decline on record in March, as the blockade of the Strait of Hormuz triggered by Middle East conflicts is striking the global oil supply system with unprecedented force.

According to the OPEC monthly report, OPEC crude oil daily production plummeted by 7.88 million barrels in March to 20.79 million barrels, a drop surpassing the historical low during the 2020 COVID-19 pandemic, with significant production cuts recorded in Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait. Meanwhile, international oil prices hovered around $102 per barrel in London trading on Monday as tensions between the US and Iran continued to escalate.

OPEC revised down its global oil demand forecast for the second quarter of 2026 by 500,000 barrels per day to 105.07 million barrels per day, impacting demand growth forecasts for both OECD and non-OECD countries alike. The official reason cited was uncertainty stemming from the Iran conflict. However, upward revisions in demand growth for the second half of the year offset these effects, keeping the global oil demand growth forecast for 2026 and 2027 unchanged.

This supply shock is rapidly transmitting downstream, causing sharp increases in aviation fuel, diesel, and gasoline prices, placing the global economy under new pressure from imported inflation.

Production Decline Exceeds Pandemic Lows, Setting a Decades-Old Record

According to a report compiled by OPEC's research department in Vienna, total OPEC+ crude oil production averaged 35.06 million barrels per day in March, a decrease of 7.7 million barrels per day compared to February, primarily due to mandatory production cuts by Middle Eastern member states.

Regarding individual OPEC member data, the daily production decline of 7.88 million barrels far exceeded previous historical peaks—in May 2020, OPEC+ voluntarily implemented massive production cuts due to the collapse in global fuel demand caused by the pandemic, with a single-month decline of 6.28 million barrels at that time. This data aligns closely with the monthly production survey results released by the agency last week.

The Strait of Hormuz has been closed for six weeks. As one of the world's most critical oil transport corridors, this choke point in the Persian Gulf led to regional oil-producing nations being forced to actively compress their output. It is reported that OPEC's monthly report made no mention whatsoever of the Strait of Hormuz blockade.

Largest Cuts in Iraq and Saudi Arabia; Pressure Concentrated on Core Gulf Nations

By country, Iraq experienced the most severe production crash in March, with daily output plummeting by 2.56 million barrels to 1.63 million barrels, ranking highest among OPEC members. Saudi Arabia followed closely, with daily production falling by 2.31 million barrels to 7.8 million barrels. The UAE and Kuwait also recorded significant production cuts.

All four countries are major oil producers along the Persian Gulf coast, whose export channels rely heavily on the Strait of Hormuz. The closure of the strait directly severed major export pipelines, forcing large-scale idling of capacity within the region.

Demand Forecast Revised Down; Second-Half Growth Fills the Gap

In this monthly report, OPEC revised down its global oil demand forecast for the second quarter of 2026 by 500,000 barrels per day, affecting both OECD and non-OECD countries, which OPEC attributed to demand-side uncertainty caused by the Iran conflict.

However, OPEC simultaneously upgraded its demand forecast for the second half of 2026, keeping the full-year demand growth figure unchanged. Global oil demand growth forecasts for 2026 and 2027 remain unchanged, indicating that OPEC currently judges this shock to be concentrated mainly in the first half of the year, without fundamentally reversing the global supply-demand situation for the full year.

Oil Prices Approach $100 Mark; Inflation Risks Spread Globally

International oil prices hovered around $102 per barrel in London trading on Monday. According to CCTV International News, after the US President arrived at Andrews Air Force Base in Maryland aboard the "Air Force One" special aircraft, he told the media that the US military would implement a blockade against Iran at 10:00 AM Eastern Time on April 13, which is 10:00 PM Beijing time tonight.

The disruption of the Strait of Hormuz has caused significant price surges in terminal products such as aviation fuel, diesel, and gasoline, exposing the global economy to a new wave of inflationary pressure. This situation presents new policy challenges for central banks worldwide, especially given that inflation has not yet fully receded.

Before the outbreak of conflict on February 28, major OPEC+ members had been advancing plans to restore production levels compressed over many years. At a video conference on April 5, all parties agreed to symbolically schedule a modest increase in production for May as a continuation of this process. The next meeting is scheduled for May 3.

However, the March production data indicates that actual losses in regional capacity far exceed the scope that any prior production increase plan could cover. When the Strait of Hormuz reopens and how the Middle East situation evolves will largely determine OPEC+'s future production path and pace of increasing output.