Kuwait’s oil sector has been plunged into its worst crisis in decades as the ongoing US-Iran war continues to disrupt crude exports through the strategically vital Strait of Hormuz.
Six months into the conflict, Kuwait remains heavily dependent on the waterway for access to global energy markets. Unlike Saudi Arabia and the United Arab Emirates, Kuwait has no major pipeline route capable of bypassing the strait, leaving its oil exports vulnerable to the prolonged disruption.
Oil is the backbone of Kuwait’s economy, accounting for more than 90% of government revenue and nearly all export earnings. The country also holds around 6% of the world’s proven oil reserves.
Kuwait Petroleum Corporation (KPC) Chief Executive Sheikh Nawaf Saud Al-Sabah described the situation as the country’s most severe oil-sector crisis since Iraq’s 1990 invasion.
The current conflict has disrupted production and exports while Iranian strikes have repeatedly targeted energy infrastructure, desalination facilities and US military installations. KPC headquarters was also damaged in a drone strike in April, forcing the company to relocate to temporary offices.
KPC declared force majeure shortly after the war began, protecting it from contractual obligations that could not be fulfilled because of the conflict. The declaration was lifted in June.
Before the war, Kuwait was producing more than 2.6 million barrels of crude oil per day and had set an ambitious target of reaching 4 million barrels per day by 2040.
Al-Sabah said Kuwait could quickly restore production once the Strait of Hormuz reopens and normal maritime traffic resumes.
“Once the strait is open, it reverts to free movement,” he said, adding that Kuwait could return to pre-war production levels and potentially exceed them.
The crisis has underscored Kuwait’s vulnerability to any prolonged disruption in the Strait of Hormuz, one of the world’s most important energy chokepoints.