OPEC crude output fell by 830,000 barrels per day in April to its lowest level in more than two decades, according to a Reuters survey published this week, as the effective closure of the Strait of Hormuz forced Gulf producers to curtail exports and Saudi Aramco CEO Amin Nasser warned that the market is now losing approximately 100 million barrels of supply each week.
The Numbers
The Reuters survey of secondary sources puts OPEC's April production at the lowest monthly level since 2000, with the 830,000 bpd month-on-month decline concentrated in Iran, Iraq, Kuwait, and the UAE — all of which depend on Hormuz transits for the bulk of their exports. Iran's loadings have effectively halted; Iraq's southern Basrah exports have fallen by more than a third; Kuwait and the post-OPEC UAE have curtailed liftings by similar margins as buyers refuse to take cargoes without escort cover.
Saudi Arabia, which retains the optionality of routing barrels via the East-West Pipeline to Yanbu on the Red Sea, has held its production broadly steady but is running pipeline capacity near the operational ceiling. The kingdom has explicitly declined to draw on spare capacity to defend price levels, a posture confirmed at the May 3 OPEC+ ministerial — the first such meeting held without the UAE following its withdrawal on May 1.
Aramco CEO: 100 Million Barrels a Week
Speaking at an industry conference on Monday, Saudi Aramco chief executive Amin Nasser put the cumulative weekly supply loss at approximately 100 million barrels — equivalent to roughly 14 million bpd, broadly consistent with the IEA's estimate of normal Hormuz crude and condensate throughput. Nasser cautioned that prolonged disruption would push any return to global market balance into 2027 and warned that the inventory cushion built up during 2025 has been "substantially eroded" by the recent draws.
The Aramco assessment is materially more bearish on supply normalization than the consensus sell-side view of three months ago, and represents the first time a senior Gulf executive has publicly framed a 2027 baseline for re-balancing. The remarks helped support the Monday rally in front-month Brent that lifted the benchmark to $104.21 per barrel.
Why Production Is Lower Than the Quota
The collapse in OPEC output is not a policy choice but a logistical consequence. The May 3 OPEC+ ministerial approved a 188,000 bpd output increase for June. In practice, Gulf members are producing well below their quotas because they cannot move the barrels — refiners will not take cargoes without robust war-risk cover, and the multinational naval escort regime can only handle a fraction of normal traffic.
This creates a structural anomaly: the bloc is simultaneously offering more supply on paper while delivering less in reality. The disconnect is one reason why the term structure has steepened sharply, with prompt Brent commanding a premium of more than $7 over the six-month contract.
Non-OPEC Compensation
Producers outside the Gulf have stepped up modestly. U.S. crude exports continue to run at record levels above 5.5 million bpd, supported by Strategic Petroleum Reserve releases and expanded Permian throughput. Russian Urals loadings from Baltic ports have risen, and Kazakhstan's CPC blend exports via Novorossiysk are near pipeline capacity. Nigerian and Angolan output has nudged higher within OPEC+ ceilings.
In aggregate, however, the offset is partial. The IEA's latest monthly report estimates the global market is short roughly 4 to 5 million bpd relative to a normalized baseline, with the gap clearing through a combination of stock draws, demand destruction in price-sensitive Asian markets, and continued SPR releases by IEA member countries.
UAE Exit Complicates the Picture
The United Arab Emirates' withdrawal from OPEC and OPEC+, effective May 1, removes approximately 3 million bpd of nominal capacity from the bloc's policy framework. In the near term the impact on supply is limited — Emirati barrels remain in the market — but the institutional consequences are significant. The May 3 ministerial was the first held under the smaller seven-member voluntary-cut group, and the absence of the UAE complicates the bloc's ability to coordinate any future emergency response.
Abu Dhabi has publicly committed to expanding to 5 mb/d of nameplate capacity by 2027, a target that, if delivered, would meaningfully reshape Gulf supply dynamics independent of OPEC+ guidance. In the current disrupted environment, however, the additional capacity is largely theoretical: the barrels cannot reach buyers without Hormuz access.
Implications for Price
The combination of falling realized OPEC output, Aramco's explicit 2027 re-balancing baseline, and Trump's Monday remarks rejecting the Iranian counterproposal has shifted the analyst consensus distinctly higher. Goldman Sachs flags $125 as the relevant escalation target; JPMorgan has nudged its central case to $98–$112; Citi cautions that the market may be under-pricing a tail scenario in which the U.S. moves from blockade to direct interdiction of Iranian infrastructure.
Options markets reflect the conditional regime. Open interest in the May and June $130 calls remains elevated, and the put-call skew is firmly tilted toward continuing upside protection. For physical buyers, the more pressing question is no longer the headline price but the availability of escorted lifting windows.
What to Watch
The May 21 OPEC+ Joint Technical Committee meeting is the next scheduled policy waypoint. Any signal that Saudi Arabia is willing to deploy spare capacity to defend a price ceiling would be material; the current posture suggests no such intervention is imminent. The IEA's next monthly oil market report, due May 14, will provide a refreshed supply-demand balance and may revise the agency's 2026 demand outlook lower to reflect price-induced destruction in Asia.
For now the picture is unusually clear by the standards of the past two months: less OPEC supply, less prospect of a Hormuz reopening, and an Aramco CEO publicly endorsing a 2027 re-balancing baseline. The $100 handle that markets briefly entertained as a ceiling is increasingly looking like a floor.