West Asia crisis: Kuwait reduces oil output citing Iran threats to Strait of Hormuz shipping

Kuwait has announced a precautionary reduction in oil production as tensions escalate across the Middle East following the ongoing war involving Iran, raising fresh concerns about disruptions to global energy supplies.  

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In a statement on March 7, the state-run Kuwait Petroleum Corporation (KPC) said the move was part of a “risk management and business continuity strategy” amid growing security threats in the region. The company cited Iranian attacks on Kuwait as well as threats to shipping through the strategic Strait of Hormuz, through which roughly a fifth of the world’s oil trade passes.  

KPC did not disclose how much output had been reduced, but said the step was strictly precautionary and would be reviewed as the situation evolves. The company added that production could be restored once regional conditions stabilise.  

Kuwait is among the world’s major oil producers, pumping about 2.6 million barrels per day in February. Any adjustment to its output is closely watched by global markets already rattled by supply disruptions linked to the conflict.  

The week-old war has already triggered production cuts and export disruptions across several Gulf producers. Oil fields in Iraq have reportedly cut production by as much as 1.5 million barrels per day as export routes and storage facilities face mounting pressure due to shipping risks in the Gulf.  

Meanwhile, Qatar has declared force majeure on significant volumes of liquefied natural gas exports following attacks and operational disruptions that forced the shutdown of parts of its gas production and liquefaction infrastructure.  

Analysts say the ripple effects could widen further across the region. Producers in the United Arab Emirates are also facing mounting logistical pressure as storage facilities fill up and tanker traffic through the Strait of Hormuz becomes increasingly risky. Market watchers warn that the UAE could be the next major producer to scale back output if the conflict continues to disrupt shipping routes.  

The Strait of Hormuz — located between Iran and Oman — remains one of the world’s most critical energy chokepoints, handling roughly 20% of global oil shipments. Any threat to maritime traffic there has an outsized impact on global energy markets.