{"id":485550,"date":"2026-06-10T10:54:24","date_gmt":"2026-06-10T10:54:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/485550\/"},"modified":"2026-06-10T10:54:24","modified_gmt":"2026-06-10T10:54:24","slug":"kuwaits-stubborn-geography-forces-a-new-playbook-for-its-energy-sector","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/485550\/","title":{"rendered":"Kuwait’s ‘stubborn’ geography forces a new playbook for its energy sector"},"content":{"rendered":"

Kuwait Petroleum Corporation is planning for the long haul by expanding pipeline capacity with its neighbours and inviting foreign investment, after the Iran war<\/a> choked off its access to the Strait of Hormuz<\/a> and led to a collapse in production, its chief executive said.<\/p>\n

Oil production in Kuwait<\/a>, Opec’s fifth-largest producer, fell by 53 per cent to 1.21 million barrels per day in March. Unlike Saudi Arabia or the UAE, Kuwait lacks the alternative pipelines to bypass the waterway, through which 20 per cent of the world’s energy supply passes.<\/p>\n

Sheikh Nawaf Al Sabah, who is also deputy chairman of the company, said one action the company took \u201cas we saw that this war was about to commence\u201d was to return its tanker fleet home and deplete all of its storage to push as much product through the strait.<\/p>\n

\u201cBeing all the way up into the north-west part of Hormuz with no direct access outside the strait, we have had to react differently in how we do our business,\u201d Sheikh Nawaf told an energy conference in Washington.<\/p>\n

Kuwait cut production to the level needed only for local use and sold its refined products in the Gulf. Kuwait has some of the region’s largest refining complexes, including the 615,000 bpd-capacity Al Zour and 346,000 bpd Mina Al Ahmadi<\/a>, which was attacked during the war.<\/p>\n

“Kuwait is still mostly an oil and gas-dependent country, so the impact on their economy is going to be devastating,” said Kristin Smith Diwan, a senior resident scholar at the Arab Gulf States Institute.<\/p>\n

KPC’s strategy of selling product to Saudi Arabia, Qatar, the UAE and Bahrain, while importing liquefied natural gas from Qatar \u2013 which could not sell volumes through Hormuz \u2013 created a \u201cmini economy\u201d of intra-Gulf trade, Sheikh Nawaf said. <\/p>\n

Calling Kuwait’s geographical position \u201cstubborn\u201d, he said the country plans to work collectively with the Gulf Co-operation Council to mitigate supply risks in the future.<\/p>\n

\u201cIt’s tough for us to change our geography \u2026 the GCC states are working together better than we have in quite some time, and really looking at how to address these situations collectively,\u201d Sheikh Nawaf said.<\/p>\n

\"\"<\/p>\n

Kuwait is in discussions with Saudi Arabia and the UAE to look at expanding the existing pipeline system to accommodate Kuwaiti oil, he said.<\/p>\n

About 80 per cent of Kuwait’s shut-in production could be returned in less than a month, with the last 20 per cent taking up to three to four months, he said.<\/p>\n

Saudi Aramco, which operates a 1,200km pipeline that allows for crude from the Eastern Province to be delivered to Red Sea export terminals, is operating it at its maximum capacity<\/a> of 7 million bpd. The UAE can also export oil through the Gulf of Oman in its 380km pipeline from Abu Dhabi to Fujairah. The Emirates recently announced plans for a new pipeline to double its export capacity through Fujairah. <\/p>\n

Sheikh Nawaf noted that the region’s pipeline infrastructure required better protection and stronger air defences in co-operation with the US and European partners.<\/p>\n

KPC also leant on its trading arm to keep customers supplied as well as possible, he said. On Tuesday, Kuwait offered to sell its crude to refineries in Asia<\/a> for the first time since the war broke out, with at least 4 million barrels offered to refiners in China and South Korea, Bloomberg reported.<\/p>\n

In the weeks before the war, Kuwait’s Prime Minister, Sheikh Ahmad Abdullah Al Sabah, said the country was preparing to invite international oil and gas firms to develop new hydrocarbon discoveries, including those at Al Jlaiaa last year and Al Mokhatha in 2024.<\/p>\n

Two key projects in pipeline infrastructure and offshore fields that involved foreign investors will continue, Sheikh Nawaf said. <\/p>\n

Project Peregrine, announced a day before the war began on February 28, would see KPC lease back its export pipelines to international investors, in the biggest foreign investment to date.<\/p>\n

\u201c[They] are bidding on the assumption that this war never happened, and that production has never been interrupted,\u201d Sheikh Nawaf said, noting that final bids would be made in the coming weeks.<\/p>\n

Project Seif, the second initiative, which invites international companies to develop Kuwait’s offshore fields, is \u201cstill in the nascent stages\u201d, he said. KPC has drilled four wells so far.<\/p>\n

However, the Iran war is injecting new uncertainty into the flow of financial investment into Kuwait. The country’s airport<\/a> came under Iranian drone attacks on June 3, leaving one dead and 60 injured. <\/p>\n

\u201cKuwait, like the rest of the GCC, will have to deal with the risk premium of this conflict in future investment attraction,\u201d said Karen Young, a senior research scholar at Columbia University’s Centre on Global Energy Policy.<\/p>\n","protected":false},"excerpt":{"rendered":"Kuwait Petroleum Corporation is planning for the long haul by expanding pipeline capacity with its neighbours and inviting…\n","protected":false},"author":2,"featured_media":485551,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[224734,114,2867,184,1435,85,87,46,6606,2865,789],"class_list":["post-485550","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-arabian-gulf","tag-business","tag-business-team","tag-economy","tag-energy","tag-il","tag-iran","tag-israel","tag-kuwait","tag-standard","tag-story"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/485550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=485550"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/485550\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/485551"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=485550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=485550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=485550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}