Tensions Rise in Strait of Hormuz... Kuwait Decides to Cut Oil Production

Precautionary Measures Amid Iranian Attacks and Threats to Shipping
Gulf Oil Producers' Energy Facilities Hit in Succession, Raising Concerns Over Oil Supply Disruptions

Kuwait Al Maadi Oil Storage Facility Reuters Yonhap News

Kuwait has decided to reduce its oil production in light of Iran's military threats and instability in the Strait of Hormuz.

According to reports from AFP and Bloomberg on March 7 (local time), Kuwait Petroleum Corporation (KPC), the state-owned oil company, stated, "Iran's continued attacks and ongoing threats to ships passing through the Strait of Hormuz persist," adding, "As a precautionary measure, we have decided to partially reduce crude oil production and refining throughput."

KPC explained that this measure is part of its strategy for crisis response and ensuring business continuity. The company further stated, "We are prepared to restore production to normal levels at any time once the situation stabilizes and conditions allow."

Previously, on March 3, Kuwait's key refinery complex in Al Amadi suffered a temporary reduction in oil product output following missile and drone attacks launched from Iran. As of January this year, Kuwait's crude oil production stood at about 2.6 million barrels per day, and its refining capacity was approximately 800,000 barrels per day.

Unlike other Gulf oil-producing countries, Kuwait has limited export routes for crude oil. While Saudi Arabia and the United Arab Emirates (UAE) are able to export via onshore pipelines, Kuwait—located inside the Persian Gulf—must send most of its crude oil and petroleum products overseas through the Strait of Hormuz.

Recently, a series of incidents in the Gulf region have disrupted energy facility operations due to Iranian attacks.

In Duhok province, located in the Kurdistan autonomous region of northern Iraq, oil production at the Sarsang oil field operated by U.S.-based HKN Energy was halted after a drone attack, interrupting output of about 30,000 barrels per day. Saudi Arabia also temporarily suspended operations at its large Ras Tanura refinery complex, owned by state-run Saudi Aramco, following a drone attack.

Qatar, the world's second-largest producer of liquefied natural gas (LNG), also suspended supply by invoking force majeure after a major LNG facility was damaged by an Iranian drone attack. Local reports indicate that it could take at least a month for LNG production to return to normal.

In the Gulf region, as tanker traffic through the Strait of Hormuz becomes increasingly difficult, oil storage facilities are rapidly approaching capacity. As a result, some oil-producing countries are being forced to cut back on production. Industry sources note that it takes time to ramp oilfield production back up after a cut, so even if the blockade of the strait is lifted, a shortfall in oil supply may continue for some time.

This content was produced with the assistance of AI translation services.