Kuwait’s oil sector has been largely paralysed for several months as war in the Gulf region disrupts shipping through the Strait of Hormuz, sharply reducing oil exports. The disruption has created a major crisis for Kuwait, where oil accounts for more than 90 percent of government revenue and nearly all export earnings. The strait is Kuwait’s main route for oil exports.

Unlike Saudi Arabia and the United Arab Emirates, Kuwait has no alternative pipeline route to transport oil while bypassing the strait. Kuwait Petroleum Corporation chief executive Sheikh Nawaf Saud Al-Sabah described the situation as the country’s biggest oil-sector crisis since Iraq’s 1990 invasion. While the current war has not caused destruction on that scale, Kuwait’s oil infrastructure has been damaged.

KPC declared force majeure within days of the war’s start because it could not meet contractual obligations, then withdrew the notice in June. Iranian attacks damaged water-treatment and fuel facilities, while KPC headquarters was hit by a drone attack in April. Before the war, Kuwait produced slightly more than 2.6 million barrels daily and planned to reach 4 million barrels by 2040. KPC expects transport to normalise if Hormuz reopens.