KPC Boosts Oil Output to 2 Mln b/d; Lifts All Force Majeure Notices

Kuwait Petroleum Corp. plans to raise the country’s oil production to 2 million b/d within a week, following the reopening of the Strait of Hormuz, said the Center for Government Communication in a social media post late Thursday.

The national oil company of Kuwait will also lift all force majeure notices issued during the Iran war, with immediate effect.

Repairs to damaged infrastructure have been implemented to accelerate oil production to previous levels.

KPC declared force majeure in a notice on March 7 seen by OPIS, citing “explicit threats” by Iran to the safe passage of vessels through the Strait of Hormuz, along with interruptions and impediments to crude oil and petroleum product production.

The company said in a social media post on the same day that it had implemented a precautionary reduction in crude oil production and refining throughput. It added that it would restore full operations once conditions allowed.

Prior to the regional conflict, Kuwait exported 1.21 million b/d of crude oil, 332,000 b/d of kerosene, 320,000 b/d of gasoil, 231,000 b/d of fuel oil, 200,000 b/d of naphtha, 138,000 b/d of LPG and 11,000 b/d of gasoline in February, according to data from Joint Organization Data Initiative.

KPC sold around 35,000 metric tons of 10 ppm 92 RON gasoline for Feb. 21-22 loading via a tender to an oil major, OPIS data shows. There were subsequently no further gasoline tenders, a trader said.

KPC also sold two cargoes of 29,000 mt-30,000 mt each 32-36 CST 0.71%-0.91% sulfur combination of coker gasoil, trim gasoil and unconverted oil via a tender to an oil major. The parcels were scheduled to be delivered from Kuwait on Jan. 22-23 and Jan. 28-29. Most of the company’s fuel oil exports are sold via private negotiations through its marketing unit, KPC Trading, on a CFR basis.

During the effective closure of the Strait of Hormuz, KPC’s exports of gasoil, naphtha and LPG were mostly transacted outside the Middle East Gulf via ship-to-ship transfers on an FOB or delivered basis to north Asia in the Gulf of Oman and India, according to several sources.

KPC privately offered around 90,000 mt of 10 ppm sulfur gasoil for prompt loading via an STS transfer near Sohar in Oman or the West Coast of India on June 12.

KPC issued a tender in early July last year offering 96,000 mt of 10 ppm sulfur gasoil for loading on Aug. 1-8, 2025. According to sources, it was awarded at a premium slightly less than $3.00/bbl to Middle East 10 ppm sulfur gasoil assessments.

Naphtha shipments from Kuwait dived following the Iran war, with zero loadings recorded in April, a plunge compared to the 868,000 mt of loadings in February, according to ship-tracking data from Vortexa.

Nonetheless, STS transfer activities were seen rising during the war, which allowed cargoes to flow out of the Middle East Gulf. Earlier this month, sources said Kuwait offered 65,000 mt of naphtha for delivery to Northeast Asia in mid-July through a private negotiation, marking its first such offer since the start of the war in late February.

The cargo is being offered on either an FOB or DES basis, according to a source who participated in the negotiations. However, buying interest was limited, with the potential buyer eventually withdrawing from discussions, citing near-full-storage capacity and ample term cargo supplies.

The producer was last known to have sold, via a spot tender which closed on Jan. 16, 50,000 mt full range naphtha loading over Feb. 11-12 from Kuwait at around $14/mt premium to the Arab Gulf spot assessment, according to OPIS data.

KPC usually offers year-long term contracts starting in April, August and December, with negotiation cycles taking place in Singapore in February, June and October, respectively. Sources noted that the term negotiations will continue this year, although no further updates have been heard.

In the LPG market, before the force majeure was lifted, KPC conducted four STS transfers involving 44,000 mt evenly split propane-butane cargoes for delivery into India in June.

KPC last sold a 44,000 mt split cargo via a tender, which closed on July 4, for July 18-19 loading from Mina al-Ahmadi on an FOB basis at a discount in the low-$50s/mt to the Saudi Aramco contract price, according to market sources.

Sources noted that Indian importers have been among the first buyers to return to Middle East supply following the reopening of the Strait of Hormuz, as the country was among the hardest hit by supply disruptions during the conflict. Following the announcement of the U.S.-Iran memorandum of understanding, Indian public sector undertaking companies Bharat Petroleum Corp. and Indian Oil Corp. have issued shipping tenders seeking very-large gas carrier tonnage, with loading options including Middle East ports.

“Indian buyers have an immediate need to secure supply after months of shortages, so they are the first to return. Other importers — such as those in China and Japan — may take longer, as they have already diversified their supply sources or current demand levels do not justify an immediate return to Middle East cargoes,” an analyst said.

KPC operates three refineries with a combined capacity of 1.42 million b/d. This includes the 346,000 b/d Mina Al-Ahmadi refinery, the 454,000 b/d Mina Abdullah refinery and the 615,000 b/d Al-Zour refinery, according to the company’s website.

—Reporting by Thomas Cho, tcho@opisnet.com; Kite Chong, kchong@opisnet.com; Cheryl Lee, clee@opisnet.com; Yiwen Ju, yju@opisnet.com; and John Koh, jkoh@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com