The Kuwait Petroleum Corporation (KPC) has extended a force majeure on its oil exports, citing continued high risk for tanker passage through the Strait of Hormuz. This legal declaration, initially made in early March following the start of U.S.-Israeli strikes on Iran, allows KPC to suspend contractual shipments without penalty until the risky circumstances are resolved.

Strategic and Economic Context

Prior to the conflict, KPC was producing approximately 2.6 million barrels per day (bpd) of oil. With Kuwait's domestic refinery capacity estimated at 1.8 million bpd, the remainder was available for export. The Strait of Hormuz is a critical global chokepoint, with an estimated 20 million bpd of oil and 21 million bpd of condensate—about one-fifth of global consumption—passing through it before the war.

Regional Tensions and Incidents

The security situation remains volatile. Iran initially declared the Strait open before reversing its stance after the U.S. reaffirmed its naval blockade. Tensions escalated further with the U.S. seizure of an Iranian-flagged container ship that attempted to evade the blockade. Additionally, Kuwait's Ministry of Interior acknowledged significant damage to its oil installations and key infrastructure from Iranian drone attacks in early April.

Diplomatic Stalemate

The prospect for a near-term resolution appears low. A two-week ceasefire between the U.S. and Iran is set to expire, with no confirmation on continuing peace talks. Iran's parliamentary speaker has stated the country will not negotiate under threat and has been preparing to "show new cards on the battlefield," indicating a potential escalation.