Strait of Hormuz shutdown forces Gulf oil cuts as prices surge
Mar 8th 2026
Attacks tied to the Iran conflict have effectively closed the Strait of Hormuz, prompting Gulf producers to curb output, accelerating storage fill rates and sending crude prices toward and above $100 per barrel.
- The Strait of Hormuz is effectively closed after recent attacks, with many tankers avoiding the route.
- Iraq has cut pumping to about 1.7–1.8 million barrels per day, down from roughly 4.3 million bpd before the conflict.
- The United Arab Emirates and Kuwait have begun reducing output as onshore storage nears capacity.
- Regional crude futures topped $100 per barrel, with Abu Dhabi Murban at $103, Oman at $107 and China futures at about $109, while Brent rose about 30% last week.
- Saudi Arabia is diverting record volumes to Red Sea terminals at about 2.3 million bpd, well below the roughly 6 million bpd it exported from the Persian Gulf in recent months.
- The United States announced up to $20 billion in maritime reinsurance and signaled wider targeting options in Iran, while Asian importers face immediate supply strains and policy responses