OPEC’s crude oil production in April collapsed to a level not seen in more than a quarter century. The cartel pumped just 20.04 million barrels per day, a drop of 830,000 bpd from March, as the closure of the Strait of Hormuz continued to strangle exports from the Persian Gulf’s biggest producers.
A historic production crisis
The April figure represents OPEC’s lowest output since at least 2000, excluding changes in membership. To put that in perspective, the cartel was producing more oil during the depths of the 2020 pandemic demand crash than it managed last month.
March had already delivered a staggering blow. That month saw a decline of 7.5 million bpd, the largest single monthly drop in OPEC’s entire history. April’s additional 830,000 bpd decline shows the bleeding hasn’t stopped.
Escalating US-Israeli military operations against Iran triggered the closure of the Strait of Hormuz, the chokepoint between Oman and Iran that connects the Persian Gulf to the open ocean, affecting about one-third of seaborne oil supplies.
Saudi Arabia, Iraq, and Kuwait bore the brunt of the disruption. Kuwait experienced the most severe impact among all OPEC member states, which makes geographic sense given its total dependence on Gulf export routes.
A ceasefire was announced on April 7. It did not help. OPEC production continued its downward trajectory through the rest of the month.
Winners in a losing game
Not every OPEC member suffered equally. The UAE, Venezuela, and Libya all managed to increase production in April. The UAE, having exited OPEC, was able to leverage alternative export routes that bypass the Strait of Hormuz entirely via the Habshan-Fujairah pipeline to the Gulf of Oman. Venezuela and Libya, sitting thousands of miles from the Persian Gulf in South America and North Africa respectively, were insulated from the Gulf disruption by geography.
Oil prices and the geopolitical premium
Oil prices soared to nearly $120 per barrel as the scale of the supply disruption became clear. With the April ceasefire failing to produce any meaningful recovery in output, the market’s anxiety looks well-founded.
What this means for energy markets and investors
The scale of the shortfall — nearly 8.3 million bpd lost across March and April combined — dwarfs what Venezuela or Libya could realistically add. Strategic petroleum reserve releases could provide temporary relief, but SPR levels in the US were already drawn down significantly in recent years. Without the Strait of Hormuz reopening in a meaningful way, this production gap persists.
