BP’s Rumaila Field Loses 700,000 BPD as Gulf Supply Shock Sends Oil 35% Higher
Oil supply shock propelled crude by 35% to over $90 a barrel as Strait of Hormuz blockade and drone attacks halted Gulf exports. Iraq’s output was cut by over half, including a 700,000 bpd reduction at BP’s Rumaila field, while Kuwait and Saudi storage nears capacity.
1. Gulf Supply Shock and Price Surge
A widening supply shock propelled crude by 35% in one week, driving prices above $90 a barrel as drone attacks crippled major Saudi oilfields and the Strait of Hormuz effectively closed, halting nearly all tanker traffic through a route that carries 20% of global oil exports.
2. BP Rumaila Field Output Reduction
Iraqi production has been slashed by over 50%, including a 700,000 barrels-per-day reduction at BP’s Rumaila field, one of the world’s largest oil assets, directly cutting BP’s output and potential revenues for the quarter.
3. Regional Storage Saturation and Production Risks
Onshore storage in Kuwait and Saudi Arabia is nearing full capacity, prompting further production cuts that could extend supply constraints, while BP faces potential operational and logistical challenges as regional stockpiles approach saturation.