Kuwait Declares Force Majeure, Cuts Crude Oil Output Due To Middle East Conflict
March 7 (Reuters) – Kuwait Oil Company began cutting oil production and declared force majeure on Saturday; This was in addition to earlier oil and gas disruptions in Iraq and Qatar as the US-Iran war blocked oil shipments from the Middle East for an eighth consecutive day. The war has blocked the Strait of Hormuz, the world’s most important oil artery, responsible for 20% of global oil and LNG supplies. Analysts predict that the United Arab Emirates and Saudi Arabia will also have to cut production as soon as their oil reserves run out.
Kuwait Petroleum Corporation (KPC) declared force majeure after conflict in the Middle East disrupted crude oil production and refining yields, according to a trading statement seen by Reuters. The national oil company did not say how much it would cut production. In February, Kuwait produced approximately 2.6 million barrels of crude oil per day.
It said the reduction was a precautionary measure and would be reviewed as the situation evolved, and remained ready to restore production levels when conditions permitted.
The statement stated that the KPC declared force majeure due to Iran’s open threats against the safe passage of ships through the Strait of Hormuz, Iran’s continued attacks on Kuwait, and the “almost complete absence” of ships to carry crude oil and products in the Persian Gulf.
The company declined to comment on the notice.
KPC is a major exporter of naphtha to Asia and a major exporter of jet fuel to northwestern Europe. Naphtha is a raw material for petrochemical production. The US-Israeli war on Iran has already spread beyond Iran’s borders, with Tehran responding by striking Israel and Gulf Arab states hosting US military facilities, and Israel launching new attacks on Lebanon after Iran-allied militia Hezbollah crossed the border.
(Reporting by Yousef Saba and Trixie Yap; Writing by Stephanie Kelly and Muhammad Al Gebaly Editing by Tomasz Janowski and Nina Chestney)
