Kuwait’s KPC Says Oil Output Just Over 2 Million Barrels a Day, Could Reach 3 Million if Hormuz Reopens

Kuwait Petroleum Corp., whose exports have no alternative route to the Strait of Hormuz, currently pumps just over 2 million barrels a day (mbd) crude oil and refined products, KPC Chief Executive Officer Sheikh Nawaf Saud Al-Nasser Al-Sabah said Monday at the Energy Intelligence Forum in London.

The figure is higher than the 1.77 mbd reported in September but still below the roughly 2.6 mbd KPC produced before the war. The near-closure of the Strait cut off its exports, and Iranian strikes damaged the state-owned company’s refineries and headquarters.

Sheikh Nawaf said KPC output could go up to its current maximum sustainable capacity of 3 mbd if export routes become available. For now, Kuwait relies solely on its own tanker fleet, which can move only about 2.1 to 2.2 mbd of crude and products. The fleet runs shuttles and ship-to-ship transfers outside the Strait despite continuing Iranian attacks on its vessels.

KPC is pursuing what Sheikh Nawaf called “an all of the above strategy” to get around the bottleneck. It is in “very close discussions” with Saudi Arabia and the United Arab Emirates about using their pipelines and ports. It plans to expand storage at home and at the refineries it has stakes in, in Vietnam, Oman and Sicily, Italy. It also wants a bigger tanker fleet, and its first few customers are now sending their own tankers into the Middle East to collect cargoes.

The market now has “an abundance, if you will, of crude on the market, but not product,” he said. That is because Middle Eastern refineries, with about 6 mbd of combined capacity, have no product pipelines and so can export fuel only by sea. He said close to 6 million barrels of product is missing from the international market, sending distillate prices “skyrocketing” and refining margins “sky high.”

Europe has been hit particularly hard, he said. After its Al-Zour refinery came online during Europe’s 2022-23 energy crisis, KPC became Europe’s largest jet fuel and its second-largest diesel supplier, but reduced flows through the Strait of Hormuz have cut their availability. KPC is now talking to European partners about holding distillate stocks there. “It is an investment we’re willing to make, but we need a partner on the other side,” he said.

According to Sheikh Nawaf, KPC remains on target to raise production capacity to 4 mbd by 2035 and domestic gas output to 2 billion cubic feet a day by 2040 – an investment of $9 billion to $10 billion a year.

–Reporting by Nia Simeonova, nsimeonova@opisnet.com; Editing by Yazdi Merchant, ymerchant@opisnet.com

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