According to Reuters, Kuwait has reduced its oil production due to the ongoing Iran war. The Kuwait Petroleum Corporation reduced crude oil production and refinery throughput. The reasons for the reduction include explicit Iranian threats against shipping in the Strait of Hormuz and ongoing Iranian attacks on Kuwait.
For more than a week, no ships have been able to pass through the Strait of Hormuz, which handles about 20% of global oil and LNG supply. There are hardly any ships available in the Persian Gulf for transporting crude oil and oil products. KPC invoked 'Force Majeure' for its actions.
Force Majeure is a contract clause that can release a party from fulfilling a contract due to unforeseeable external events. The measure by KPC is precautionary and will be continuously reviewed. KPC is ready to ramp up production again as soon as conditions allow.
Kuwait follows Iraq and Qatar, which have also reduced their production and gas deliveries. Experts expect the United Arab Emirates and Saudi Arabia may soon have to reduce their production due to dwindling storage capacities. Oil and gas prices are likely to rise further.
Brent crude oil price increased from about $73 per barrel in late February to nearly $93 on Friday. In Europe, gas prices have risen due to the Iran war, affecting LNG transport. The exact impact on global energy markets and prices beyond the reported increases remains unclear.
The timeline for when the Strait of Hormuz might reopen or when production could resume is not specified.