Saudi Arabia informed the Organization of the Petroleum Exporting Countries (OPEC) that its crude oil production has fallen to its lowest point since 1990. This disclosure highlights a severe contraction in output from the kingdom, which serves as the cartel's de facto leader.

The reported slump indicates a substantial drawdown in Saudi supply relative to historical benchmarks. By citing the 1990 low, the data underscores the magnitude of the current production cut compared to nearly three decades of prior activity.

OPEC+ Output and Demand

While Saudi output contracted, broader cartel activity showed movement. OPEC+ crude output, including former member UAE, averaged 38.05 million BPD in August 2026. This represents an increase of about 300,000 BPD from July cuts in 2026.

Global oil demand growth forecasts have also been revised. The forecast is now set at 380,000 barrels per day, down from the previous forecast of 580,000 BPD.

Market Implications

Such a significant reduction in output from a major global supplier typically exerts upward pressure on crude prices, assuming demand remains stable. The move aligns with broader efforts to manage supply levels within the OPEC framework.

What the Numbers Show

The divergence between Saudi Arabia’s historic production lows and the slight increase in overall OPEC+ output suggests other members may be offsetting Riyadh’s cuts. Additionally, the sharp downward revision in global demand growth forecasts—from 580,000 BPD to 380,000 BPD—provides context for why supply management remains critical despite the aggregate output rise.

Economist Peter Schiff warned that oil prices could rise significantly in the coming years, arguing that the Trump administration's drawdown of the Strategic Petroleum Reserve leaves the US with less protection against future supply shocks.

Schiff posted on X on Wednesday, highlighting that oil is over $95 per barrel despite efforts to suppress prices. He questioned the market condition by the 2028 Presidential Elections, noting the risks if the SPR remains empty for over a year.

Oil and Gas Prices

West Texas Intermediate (WTI) futures ending in October traded at $95.66, while Brent crude futures ending in November exceeded $100 to reach $100.56 at press time. The United States Oil Fund (NYSE: USO) fell 1.16% to $148.23 during overnight trading on Wednesday.

Data from the American Automobile Association showed the national average price of gas was $4.2245/gallon on Wednesday. Diesel averaged $5.9424/gallon, while premium gas stood at $5.1200/gallon.

Iran Tensions

Amid escalating tensions, the Islamic Revolutionary Guard Corps claimed it struck two US vessels and multiple tankers after the US Central Command said it had struck Iranian government oil tankers. CENTCOM denied the IRGC's claim, stating none of its vessels were hit.

The administration reportedly adopted a "tanker for tanker" policy to deter Iranian strikes in the Strait of Hormuz. Schiff also criticized Trump's comments about the war in Iran ending immediately after the midterms, calling it a lie.