Kuwait begins to increase oil production, set to surpass 2 million barrels per day within a week.
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As the Strait of Hormuz gradually reopens, the major oil-producing countries in the Middle East are accelerating the restoration of pre-war production capacity.
On Thursday, according to Bloomberg, Kuwait announced that it will raise its daily crude oil production to over 2 million barrels within a week and plans to restore production to pre-war levels within a few weeks, signaling a rapid return of regional supply.
Sheikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation (KPC), stated that the restoration of the country's damaged energy infrastructure is progressing faster than expected, and the pace of production increase will also exceed previous plans. He also announced that all force majeure declarations issued during the war due to inability to fulfill supply contracts are immediately lifted.
This decision follows the temporary peace agreement between the US and Iran. With the reopening of navigation through the Strait of Hormuz, Saudi Arabia has already arranged oil tankers to return to routes, and major oil-producing countries such as Iraq are also increasing export volumes. The market widely expects that crude oil supply from the Middle East, previously interrupted by the war, is rapidly returning to the global market, causing international oil prices to fall to a three-month low.
Concentrated Supply Releases, Geopolitical Risk Premium Rapidly Retreats
Kuwait has sent a clear signal of increased production. According to Sheikh Nawaf Al-Sabah, the country expects to raise its daily crude oil production to over 2 million barrels within the next week, and hopes to restore to around 2.5 million barrels per day, the pre-war level, within a few weeks—provided that international commercial shipping continues to operate normally. Due to the impact of the war, the Strait of Hormuz was blocked, resulting in Kuwait’s crude oil storage rapidly saturating, and daily production plummeted to about 500,000 barrels.
Kuwait is not the only oil-producing country restoring capacity. Crude oil exports from Basra, a major production area in southern Iraq, are also synchronously recovering. As tankers arrive consecutively and inventory pressure eases, local loading operations are gradually returning to normal. Meanwhile, Saudi Arabia has had oil tankers pass through the Strait of Hormuz this week, with more ships redeploying. As the main oil-producing countries lift supply restrictions, the Middle East crude oil supply chain is entering a stage of comprehensive post-war restart.
While restoring production capacity, Kuwait also emphasized stabilizing contract supply as soon as possible. Sheikh Nawaf Al-Sabah stated that Kuwait Petroleum Corporation (KPC) will actively communicate and coordinate with customers to ensure smooth connection of contracted supply volumes and strictly fulfill relevant agreements.
With force majeure declarations withdrawn, export capacity continues to rise, and major oil-producing countries such as Saudi Arabia and Iraq simultaneously increasing production, suppressed Middle East supply during the war is now being released in concentration. For the global crude oil market, rapid restoration of supply means the risk premium caused by geopolitical conflicts is fading quickly, and market focus will shift back to the contest between supply surplus and demand outlook.
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