Kuwait is actively offering its crude oil to refiners in Asia, marking the first time it has done so since the war with Iran began. This move is seen as a key indicator that oil shipments from Persian Gulf producers are resuming, despite previous threats to shipping through the Strait of Hormuz. At least 4 million barrels of Kuwait's main export grade, transported on two very large crude carriers, are being offered to refiners in countries like China and South Korea.
Adding to this indication of reopening, Kuwait has announced plans to increase its oil output to 2 million barrels per day (bpd) within a week. This rapid increase is attributed to an interim peace deal between the US and Iran, which has facilitated the reopening of the vital Strait of Hormuz. Kuwait Petroleum Corp. Chief Executive Officer Sheikh Nawaf Al-Sabah has affirmed that essential repairs to damaged energy infrastructure are complete, allowing for a swift ramp-up in production, potentially reaching pre-war levels sooner than anticipated.
Kuwait's oil production had significantly declined during the conflict, falling to 576,000 bpd in May, as access to the Strait of Hormuz was choked off. Unlike some regional peers, Kuwait lacks alternative pipeline routes, making the Strait's reopening crucial for its export capabilities. The lifting of all force majeure notices, which were issued due to the inability to meet supply obligations during the war, will happen with immediate effect, paving the way for a phased resumption of normal operations and exports. Kuwait is also exploring discussions with Saudi Arabia and the UAE to expand pipeline capacity, aiming to bypass the Strait of Hormuz for future exports.
