By Elsie Kamsiyochi
Kuwait has begun reducing its crude oil production and has formally declared force majeure as escalating conflict in the Middle East disrupts vital energy supply routes.
The decision was announced by the state-owned Kuwait Petroleum Corporation (KPC), which said the move was a precautionary response to the growing risks posed by the ongoing war involving Iran and its regional spillover.
According to a trade notice reviewed by Reuters, Kuwait started cutting oil output on Saturday after the conflict effectively blocked shipments from the Middle East for an eighth consecutive day.
The disruption has already forced several regional producers to scale back operations, including Iraq and Qatar, highlighting the rapidly widening impact of the crisis on global energy markets.
At the center of the disruption is the Strait of Hormuz, the narrow waterway connecting the Persian Gulf to the Arabian Sea.
This strategic passage is one of the most critical chokepoints in the world’s energy network, responsible for transporting roughly 20% of global oil and liquefied natural gas (LNG) supplies. With military tensions rising and shipping routes increasingly unsafe, many oil tankers have stopped passing through the strait, creating a major bottleneck for exports.
Analysts warn that if the disruption continues, other major Gulf oil producers—including the United Arab Emirates and Saudi Arabia—could soon be forced to follow Kuwait’s lead by reducing production due to limited storage capacity for unsold crude.
Kuwait Petroleum Corporation stated that the reduction in output and refining operations was a temporary precaution and would be reassessed as the situation evolves.
The company emphasized that it remains prepared to restore normal production levels once security conditions improve and shipping routes reopen.
While KPC did not disclose the exact scale of the production cuts, Kuwait produced approximately 2.6 million barrels of crude oil per day in February, making it one of the region’s key suppliers to international markets.
The company cited several factors behind its force majeure declaration, including what it described as explicit threats from Iran against ships attempting to pass through the Strait of Hormuz.
The trade notice also referenced ongoing attacks targeting Kuwait and the near-total absence of available vessels willing to transport crude oil and petroleum products within the Arabian Gulf due to the heightened security risks.
A force majeure declaration allows companies to suspend contractual obligations when extraordinary circumstances beyond their control prevent them from fulfilling agreements. In this case, the escalating military conflict and severe disruption to maritime trade routes have made it difficult for Kuwait to guarantee oil deliveries to international buyers.
Kuwait plays a crucial role in global fuel markets beyond crude oil. The country is a major exporter of naphtha to Asian markets, where it is used as a key feedstock in petrochemical production.
Kuwait is also an important supplier of jet fuel to northwestern Europe, meaning that prolonged disruptions could affect industries ranging from aviation to plastics manufacturing.
The broader conflict continues to intensify across the region. The U.S. and Israel’s war with Iran has expanded beyond Iranian territory, with Tehran launching strikes against Israel and Gulf Arab countries that host U.S. military bases.
In response, Israel has carried out new military operations in Lebanon after Iran-backed Hezbollah militants fired rockets across the border.
Energy markets are closely watching the situation, as prolonged instability in the Gulf could trigger a significant global supply shock.
With multiple oil producers already cutting output and the Strait of Hormuz effectively closed to normal traffic, analysts warn that oil prices and fuel costs worldwide could remain volatile for weeks or even months if the conflict continues.
For now, Kuwait’s decision to reduce production underscores the growing strain on the global energy system as one of the most critical oil-producing regions in the world faces its most serious disruption in years.
Source Reuters