Kuwait looks abroad for oil storage as regional tensions persist

Kuwait is considering expanding its overseas oil storage capacity to strengthen its ability to supply global markets following disruptions to shipping through the Strait of Hormuz, a senior executive at Kuwait Petroleum Corp. (KPC) has said.

Speaking at the S&P Global Energy MPGC 2026 conference in London, Sheikh Khaled Al Sabah, Managing Director of International Marketing at KPC, was cited by Bloomberg as stating that the waterway remains unsafe for energy shipments even when it is not fully blocked.

“Kuwait is exploring opportunities to increase oil storage abroad and is holding discussions with neighbouring countries on potential pipeline alternatives,” he said.

The small Gulf state, which relies entirely on exports passing through the Strait of Hormuz, has in recent years secured limited storage capacity in South Korea and Japan. During the current conflict, the country has significantly reduced crude oil production, although fields continue operating at minimum levels to prevent damage and enable a rapid return to full output.

The conflict involving Iran, Israel and the United States has caused major disruptions in global energy markets, affecting a significant share of oil and gas flows from the Gulf and driving energy prices sharply higher. Despite an ongoing ceasefire, uncertainty remains over the long-term security of the Strait of Hormuz as a key export route.

Sheikh Khaled said Kuwait has continued exporting some refined petroleum products to neighboring Gulf states, allowing several refinery operations to continue. Gulf producers are prioritizing domestic fuel demand while marketing surplus refined products within the region.

According to the executive, Kuwait's refineries could return to normal operating levels within weeks of the Strait reopening, while crude oil production could recover to around 70% of normal capacity within six to eight weeks.

By Nazrin Sadigova