Kuwait is slashing its oil and fuel production because cargo ships can no longer safely pass through the Strait of Hormuz. The ongoing conflict with Iran has forced this major energy producer to take drastic steps as the regional war rapidly worsens.
Kuwait Petroleum Corporation announced these cuts directly in response to severe Iranian threats against commercial cargo ships. The company reduced daily output by about 100,000 barrels on Saturday and plans to triple that drop by Sunday. Facility managers will keep adjusting these numbers based on available storage space and safety conditions in the strait.
The expanding war has essentially stopped all maritime traffic in this crucial area. Blocked oil exports push global oil prices up to nearly $93 a barrel in London. Neighboring countries face the exact same nightmare right now. Iraq recently started holding back its oil because its storage tanks sit completely full.
Saudi Arabia shut down its biggest refinery, and Qatar closed the largest natural gas plant in the world following recent drone strikes. To survive the growing crisis, Kuwait Petroleum declared a formal legal emergency. This specific move lets the company pause its sales contracts when unstoppable events occur outside its control.
Kuwait pumped over two and a half million barrels of oil every single day in January. Unfortunately, the Strait of Hormuz serves as the only exit route for all this fuel. While Saudi Arabia can redirect some of its crude oil to the Red Sea, Kuwait simply lacks that alternative route.
Local refinery managers already started slowing down their processing plants since they have nowhere to put the finished fuel. Major facilities like Al-Zour process huge amounts of oil daily, but they must now run at much lower speeds to avoid completely overflowing their massive storage tanks.
Iran continues to target Kuwait with intense drone and missile strikes. These violent attacks recently hit the main passenger airport, the American embassy, and a military air base housing United States troops, throwing the entire nation into a state of absolute chaos.
