Kuwait has declared force majeure on crude oil and refined product shipments due to the blockade of the Strait of Hormuz, which prevents it from meeting obligations to customers unable to bring vessels into the Persian Gulf. State-run Kuwait Petroleum Corp. invoked this contractual clause, though supplies will not come to a complete halt.

Impact of the Strait of Hormuz Disruption

The Iran war has brought traffic through the Strait of Hormuz to a near-standstill, causing regional storage tanks to fill up and disrupting global oil markets. The shutdown of this critical waterway severely impacts Persian Gulf countries that depend on energy-export revenues to fund public spending.

Regional Production Cuts and Kuwait's Specific Challenges

Countries across the region have reduced output of oil, gas, and refined products due to the Hormuz shutdown and Iranian strikes. The U.S. government estimated over 9 million barrels per day of oil production would be shut in during April. Kuwait, having suffered multiple hits to its oil infrastructure, now has output at levels last seen in the early 1990s after the Iraqi invasion. Full production recovery will take time once hostilities ease, potentially continuing to impact exports.

Recovery Outlook

Kuwaiti officials have stated that output could return to prewar levels within a few months of the conflict ending.