Middle East cuts 6.5M barrels/day — largest oil supply shock since 1973 Arab embargo

Bloomberg News reported that Middle Eastern oil producers have made sweeping output cuts as the Iran war forces shipping to avoid the Strait of Hormuz. Saudi Arabia has lowered oil output by between 2 million and 2.5 million barrels a day. The UAE has cut its output by 500,000–800,000 barrels a day. Kuwait has also cut output by half a million barrels a day. Iraq has cut by approximately 2.9 million barrels a day — the most significant single-country reduction, reflecting both Hormuz closure and the conflict's direct impact on Iraq's export infrastructure. Combined, the Gulf producers have taken roughly 6.5 million barrels per day offline — more than 6% of global daily supply. For context: the 1973 Arab oil embargo cut global supply by approximately 5 million barrels per day and triggered a global recession. The 1990 Gulf War disruption was approximately 4.3 million barrels per day. This is the largest supply shock in oil market history. The cuts come as Saudi Aramco CEO warned the same day that Hormuz closure consequences could be 'catastrophic.' The G7 and IEA are planning an emergency coordinated strategic reserve release to cushion the impact.