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OPEC Output Plunges Further as U.S. Squeezes Iran
Output of 16.33 Million Barrels a Day Is Lowest in 37 Years
Key Takeaways:
- OPEC crude output fell to 16.33 million barrels a day in May, the lowest in at least 37 years, led by steep declines in Iran, Kuwait and Saudi Arabia.
- The drop reflects war disruptions and a U.S. blockade on Iran that have constrained Strait of Hormuz traffic and sharply reduced Middle East production capacity.
- OPEC+ is expected to continue modest quota increases starting June 7 despite outages, with further planned hikes through September as supply restoration efforts proceed.
OPEC crude output fell last month, hitting its lowest level in decades as the U.S. blockade of Iran and disruption in the Persian Gulf continued to curb production.
Output from its 11 current members dropped by 1.22 million barrels a day to 16.33 million a day in May, with Iran accounting for more than half of the decline, according to a Bloomberg survey. That was the lowest in at least 37 years. The data excludes the United Arab Emirates, which left the Organization of the Petroleum Exporting Countries last month after six decades.
War between a U.S.-Israeli alliance and Iran has taken a heavy toll on oil supplies from the Middle East, largely shuttering the critical Strait of Hormuz waterway and forcing Saudi Arabia, Iraq, the UAE and Kuwait to slash crude production. Iran’s shipments are also under pressure after the U.S. imposed a blockade of its ports in mid-April.
Iran’s output tumbled by 710,000 barrels a day to a five-year low of 2.34 million a day last month, the survey showed. Central Command said U.S. forces have redirected 127 commercial vessels to enforce the blockade of all maritime traffic entering and exiting Iranian ports.
The next-biggest decline last month was in Kuwait, where production fell by 310,000 barrels a day to 490,000 a day — less than a fifth of pre-war levels. After that came group leader Saudi Arabia, down 240,000 barrels a day to 6.57 million a day.
The production shut-ins haven’t stopped OPEC and its allies from symbolically increasing quotas over the past few months, continuing — if only on paper — a yearlong process of restoring output halted several years ago.
Hormuz traffic remains constrained
Confirmed Strait of Hormuz crossings held at 10 over the weekend, remaining lower than the previous weekend and reflecting a more restricted operating environment. Most activity involved low risk, non commercial vessels, with only limited… pic.twitter.com/BsMJSRNU7n — Kpler (@Kpler) June 1, 2026
Three OPEC+ delegates say they expect key members to nudge up targets by a modest 188,000 barrels again in July during a video conference on June 7. The session is one of four online meetings OPEC and its partners are due to hold that day.
Quota Hikes
Delegates have said the alliance has plans for two more monthly quota hikes in August and September, which would theoretically complete the restoration of the second of three tranches of supply cutbacks made in recent years. A third layer is due to remain offline until the end of the year, though officials said this week it could be fast-tracked.
The Iran war gave the UAE an opportunity to leave OPEC at a moment when it would cause the least disruption. Abu Dhabi had long been frustrated that OPEC’s quotas prevented it from deploying new investments in production capacity.
UAE output bucked the general trend of Middle East declines in May, rising by 300,000 barrels a day to 2.44 million a day, according to the survey.
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Saudi Arabia’s Aramco Trading Co. and the UAE’s state oil company Adnoc are among firms that have managed to move some crude cargoes through the Strait of Hormuz since Iran largely closed the waterway, people familiar with the situation said last month.
Bloomberg’s production survey is based on ship-tracking data, information from officials and estimates from consultants Rapidan Energy Group, FGE NexantECA, Kpler and Rystad Energy.
Written by Grant Smith, Julian Lee, Bill Lehane and Prejula Prem
