Saudi Arabia successfully increased its oil production to 8 million barrels per day (bpd) in September 2023, representing a 12.2% growth compared to the previous month. This increase in production is part of efforts to enhance oil exports following a sharp decline in production during the spring and early summer of this year.
Production Status Amidst the Hormuz Crisis
Saudi oil production is gradually recovering after a significant drop due to oil transportation issues through the Strait of Hormuz. The country has addressed the recovery of production by increasing ship-to-ship (STS) transfers outside the Strait of Hormuz and directing more of its exports to the Red Sea port of Yanbu. Although production was halted for two weeks in September 2023 due to the September 10 attacks on the East-West pipeline and loading at Yanbu, Saudi Arabia managed to boost its production by rerouting crude oil transportation through Hormuz and transferring shipments to other vessels in the Gulf of Oman.
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Impact on Oil Revenues and Economy
By the end of September, Brent crude oil prices reached $103.5 per barrel, which, along with the increase in oil production, has boosted Saudi Arabia's revenues from oil sales. At the same time, non-oil indicators also suggest an improvement in the economic situation. Consumer spending in August 2023 increased by 6.4% compared to the previous year, and the Purchasing Managers' Index (PMI) in September recorded its highest level since February. However, the economic picture in Saudi Arabia remains mixed, as the country's non-oil exports in August 2026 decreased by 11.5% compared to August 2025.
In the second quarter of 2026, during the peak of the Hormuz crisis when ship movements had sharply declined, Saudi Arabia's real GDP decreased by 4.7% compared to the previous year, primarily due to a 24.8% drop in oil activities. While government and non-oil activities increased by 0.9%, real GDP based on seasonal adjustments decreased by 4.8% compared to the first quarter.
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