Kuwait expects to raise its oil production to 2 million barrels per day (bpd) within a week, up from an average of 573,000 bpd in May, amid the reopening of the Strait of Hormuz.
This estimate was given by Sheikh Nawaf Saud Al-Sabah, deputy chairman and CEO of Kuwait Petroleum Corporation (KPC), to Kuwait News Agency, before the collapse of the talks between the U.S. and Iran on Friday.
“Prewar production levels could be restored within weeks once regular international commercial shipping to Kuwait ports has resumed,” Al-Sabah was quoted as saying.
Kuwait’s production has collapsed to below 600,000 bpd in recent weeks as one of OPEC’s top producers has been one of the worst affected producers by the closure of the Strait of Hormuz due to a lack of alternative export outlets.
Kuwait doesn’t have an export outlet not depending on the Strait of Hormuz and was forced to slash its oil production.
The U.S.-Iran memorandum of understanding and the reopening of the Strait have made Middle Eastern producers hopeful that they could begin restoring the massive production volumes they had shut-in, estimated at about 13 million bpd. That is, if the deal holds and traffic through the Strait of Hormuz begins to normalize in a sustainable way.
Even before the U.S.-Iran deal, Kuwait began offering its crude to Asian buyers for the first time since the Iran war choked off transit through the critical chokepoint.
Unlike Saudi Arabia or the United Arab Emirates (UAE), Kuwait does not have a pipeline alternative to bypass the Strait of Hormuz, which has severely stifled its crude oil exports in recent months.
Kuwait will likely need up to 12 weeks after the Strait of Hormuz re-opens to restore the oil production that has been curtailed since the war began on February 28, an official at Kuwait Petroleum Corporation (KPC) said earlier this month.
By Charles Kennedy for Oilprice.com
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