Saudi crude output at lowest levels since 1990
Severity: WARNING
Detected: 2026-05-13T13:10:01.774Z
Summary
Saudi Arabia has told OPEC its oil production has fallen again, reaching the lowest level since 1990. This signals a tighter crude market and raises odds that current supply discipline will persist, supporting a higher risk premium in oil benchmarks.
Details
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What happened: Saudi Arabia has informed OPEC that its oil output has declined again and is now at its lowest level since 1990. While exact volumes are not provided in the headline, this implies production well below Saudi Arabia’s demonstrated capacity and underscores that Riyadh is not only maintaining but deepening its voluntary supply restraint.
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Supply impact: Saudi capacity is roughly 12 mb/d, and in recent years it has typically produced in the 9–10 mb/d range when not constrained by cuts. To reach the lowest levels since 1990 implies output likely near or even below the ~7–8 mb/d range, removing at least 2–3 mb/d of potential supply compared with unconstrained levels. Even relative to 2023–24 average production, this suggests an additional several hundred kb/d of tightening. In a market already dealing with disruptions to Russian infrastructure and Iranian exports (per existing alerts), this is materially bullish for crude balances in H2 2026.
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Assets and direction: The immediate impact should be upward pressure on Brent and WTI futures, steepening the front of the curve and supporting backwardation as near-term barrels become scarcer. Dubai/Oman and Murban benchmarks, more directly linked to Middle East flows, may outperform. Time spreads (e.g., Brent M1–M6) should widen. Refined products, particularly middle distillates, may also get a bid as refiners price in tighter crude availability. Energy equities, especially integrated majors and large-cap E&Ps, are likely to react positively; energy-importer currencies (EUR, JPY, INR) could come under modest pressure, while petrocurrencies (CAD, NOK, SAR peg credibility notwithstanding) may gain.
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Historical precedent: Similar deep Saudi cuts in 2020–21 and the 2023 unilateral cuts produced multi-dollar moves in Brent within a session and raised the structural risk premium until policy direction changed. A reference to the lowest output since 1990 also evokes the Gulf War era, when Saudi policy was tightly linked to geopolitical risk.
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Duration: This development suggests a structural tightening bias rather than a brief outage. Unless reversed by an OPEC+ policy shift or a major demand shock, the impact is likely to be medium- to long-lived (months to a year), supporting higher price floors and volatility in the crude complex.
AFFECTED ASSETS: Brent Crude, WTI Crude, Dubai Crude, Murban, Brent time spreads, Oil services and E&P equities, CAD, NOK, JPY, EUR
Sources
- OSINT