OPEC crude oil production plunged by 27.5 per cent in March 2026, falling by 7.88 million barrels per day to 20.79 million barrels per day, marking the steepest single-month decline in data going back to the 1980s and surpassing even the production cuts recorded during the COVID-19 pandemic in 2020. The collapse, driven by war-related disruptions across the Gulf, has sent shockwaves through global energy markets and triggered what international agencies have described as the most severe oil supply crisis in modern history.
The Gulf Arab states cut production because they are unable to export through the Strait of Hormuz due to the war. Iraq took the biggest hit, with production collapsing 61 per cent from 4.2 million barrels per day in February to 1.6 million barrels per day in March. Output plunged 53 per cent in Kuwait and 44 per cent in the United Arab Emirates month over month. Iran’s own production edged down more modestly, falling around 5 per cent from 3.24 million barrels per day to 3.06 million barrels per day.
The crisis was triggered on February 28, 2026, when the United States and Israel initiated coordinated airstrikes on Iran under Operation Epic Fury, targeting military facilities, nuclear sites and leadership, resulting in the death of Supreme Leader Ali Khamenei. Iran responded with missile barrages on Israeli cities and US bases across the Gulf, causing casualties and infrastructure damage, and Iran’s Islamic Revolutionary Guard Corps issued warnings forbidding passage through the Strait of Hormuz and launched 21 confirmed attacks on merchant ships, reportedly also laying sea mines in the strait.
Before the war, crude and oil product flows through the Strait of Hormuz stood at around 20 million barrels per day. Since the outbreak of the conflict, shipments have plummeted to less than 10 per cent of their pre-crisis levels. The International Energy Agency described the situation as the largest supply disruption in the history of the global oil market, with Gulf countries cutting total oil production by at least 10 million barrels per day as storage filled up and export routes remained blocked.
Brent crude surged past $120 per barrel following the closure of the strait, QatarEnergy declared force majeure on all exports, and the crisis rapidly spread beyond oil markets. Gulf states that rely on the strait for over 80 per cent of their caloric intake saw 70 per cent of food imports disrupted by mid-March, forcing emergency airlifts of staples and causing consumer price spikes of between 40 and 120 per cent. Iranian strikes on desalination plants compounded a humanitarian emergency in Kuwait and Qatar, where those facilities supply 99 per cent of drinking water.
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The European Central Bank postponed planned interest rate reductions on March 19, raising its 2026 inflation forecast and cutting GDP growth projections. Dutch TTF natural gas benchmarks nearly doubled to over €60 per megawatt-hour, with economists warning that energy-intensive European economies face high risks of technical recession if the maritime blockade persists through the summer refill season. In the United States, petrol prices rose roughly 40 per cent, with President Donald Trump warning consumers to expect further increases.
Some partial relief emerged in late March, when Iran agreed to allow vessels from China, Russia, India, Iraq and Pakistan to transit the strait, and subsequently extended access to Malaysian, Thai, Philippine-flagged ships and humanitarian cargo. However, the reopening remains partial and contested. Trump announced a naval blockade of the Strait of Hormuz as a pressure measure to force Iran back to the negotiating table, even as a ceasefire announced between Washington and Tehran had been expected to restore freedom of navigation.
Sheikh Nawaf al-Sabah, CEO of Kuwait Petroleum Corp, indicated that full production restoration would take time. “We have resilient reservoirs that bring out quite a bit of production immediately, within a few days,” he said. “The bulk of it will come within a few weeks, and then the full production will come within three or four months.” In the meantime, OPEC agreed at an April 5 meeting to a symbolic increase of 206,000 barrels per day for May as part of a planned recovery process, a figure that analysts noted was largely academic given that most Gulf producers still lack the export infrastructure to move additional barrels while the strait remains restricted.
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Nigeria, notably, bucked the regional trend. The country recorded a rise in crude production to 1.84 million barrels per day in March, recovering from 1.459 million barrels per day in January and 1.31 million barrels per day in February, though it still recorded a crude oil and condensate shortfall of approximately 16.6 million barrels between January and February, underscoring continuing domestic production challenges even as the broader OPEC picture deteriorates.
