OPEC’s April 2026 Monthly Oil Market Report revealed that total Declaration of Cooperation crude oil production collapsed by 7.70 million barrels per day in March to average just 35.06 million barrels per day — one of the single largest month-on-month production drops in the group’s history outside of the April 2020 pandemic crash, driven entirely by the disruption to Middle East output caused by the Iran war and the effective closure of the Strait of Hormuz.
To put that number in context — 7.70 million barrels per day is roughly equivalent to removing the entire crude oil output of Iraq, the world’s fourth largest producer, from global supply in a single month. It is approximately 7.5% of global oil consumption vanishing from the market in thirty days. And it explains, more than any other single data point, why Brent crude averaged $99.60 per barrel in March, why the OPEC Reference Basket hit $116.36 per barrel, and why oil is trading above $102 per barrel on Monday even as a ceasefire has been announced and then effectively collapsed within five days.
Where the production went
The drop was concentrated in the Middle East members of the OPEC+ alliance whose output was directly affected by the conflict that began on February 28. Iraq recorded the sharpest absolute decline, with production falling to approximately 1.625 million barrels per day from over 4.1 million barrels per day in February — a loss of roughly 2.5 million barrels per day from a single country. Iraq’s oil export terminals at Basra, through which the overwhelming majority of its crude exports move, were operating under severe disruption as the conflict paralysed the Gulf’s maritime infrastructure.
Saudi Arabia’s output fell to 7.799 million barrels per day from 10.112 million barrels per day in February, a decline of approximately 2.3 million barrels per day. The kingdom’s primary export terminals, including Ras Tanura and Ju’aymah — together the largest oil export complex in the world — were affected by the broader maritime shutdown in the Gulf even as the physical facilities remained intact. OPEC’s overall crude production per secondary sources fell to 20.79 million barrels per day from 28.67 million barrels per day in February, a decline of nearly 7.88 million barrels per day within the OPEC membership alone.
The OPEC report described sharp reductions in shipping operations across the region, declarations of force majeure by multiple producers, and a combination of deliberate output management and operational fallout from the geopolitical escalation. The force majeure declarations are particularly significant — they represent producers formally notifying buyers that they cannot fulfil contracted supply obligations due to circumstances beyond their control, a legal and commercial acknowledgement of the supply collapse that will have downstream consequences for contract renegotiations and pricing disputes long after the conflict ends.
What it did to prices
The OPEC Reference Basket’s month-on-month jump of $48.46 per barrel in March is the mechanical consequence of removing 7.70 million barrels per day from global supply simultaneously. The GME Oman front-month contract, which most directly reflects the price of Middle East sour crude, rose $56.14 per barrel to $124.56 per barrel — a number that captures the acute tightening of exactly the crude grades that Asian refineries, including India’s, are configured to process. ICE Brent rose $30.23 per barrel to average $99.60 per barrel for the month, and NYMEX WTI climbed $26.48 per barrel to $91 per barrel.
The year-to-date average for the OPEC Reference Basket now stands at $82.96 per barrel against a full-year 2025 average of $76.77 per barrel. The centre of gravity of the oil market has shifted decisively higher, and it shifted in a single month.
The tanker market consequence
The production collapse did not merely reduce supply. It created one of the most extreme tanker freight rate environments in recorded history. VLCC rates on the Middle East-to-East route — the route through which Gulf crude reaches China, India, Japan, and South Korea — were assessed at WS434 in March, up 171% month-on-month and 623% year-on-year. Suezmax rates jumped 104%. Aframax cross-Mediterranean rates rose 68%. For every barrel of oil that did manage to move through or around the disruption zone, buyers paid dramatically more to move it — adding a logistics cost premium on top of an already elevated commodity price.
The refining consequence
Global refinery crude intake fell to 77.1 million barrels per day in March, down 5.0 million barrels per day month-on-month — the largest monthly decline since April 2020 when pandemic lockdowns shut down global transport demand overnight. The product output crunch drove refining margins to multi-year highs across every major hub. USGC refining margins against WTI rose 150% to average $40.50 per barrel. Rotterdam margins against Brent posted their largest month-on-month percentage increase among major hubs. Singapore’s margin against Oman nearly quadrupled from February levels.
Jet and kerosene crack spreads were the standout performer. The USGC jet crack against WTI averaged $78.90 per barrel in March, up $47.52 per barrel from February and $58.24 per barrel year-on-year. These are the margins that feed directly into airline ticket prices and aviation fuel surcharges worldwide.
What it means for the months ahead
OPEC kept its global oil demand growth forecast for 2026 unchanged at 1.4 million barrels per day, bringing total world demand to 106.5 million barrels per day. With actual DoC crude production averaging only 39.9 million barrels per day in the first quarter of 2026 against an implied call of 42.9 million barrels per day, the supply deficit against what the market needs currently stands at approximately 2.9 million barrels per day. That gap will either draw down inventories or require production recovery — and production recovery requires the Strait of Hormuz to function, which on Monday it is not.
The OPEC report’s feature article warned explicitly that the seasonal uptick in road and air transport fuels through summer 2026 will layer additional demand on an already strained product market. With Brent now above $102 on Monday, the US proposing a naval blockade of Tehran-linked ships, and Iran declaring a permanent Hormuz control mechanism, the production collapse that OPEC’s March data documents is not yet history. It is the baseline from which a potentially worse situation is developing in real time.
Disclaimer: This article is based on data published in OPEC’s Monthly Oil Market Report for April 2026. It is for informational purposes only and does not constitute investment advice. Readers are advised to consult a SEBI-registered financial advisor before making any investment decisions. Business Upturn is not responsible for any decisions made based on this article.