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Kuwait Commodities April 2024

Kuwait: Kuwait crude output is muted in March

Kuwait oil output rose slightly to 2.45 mbpd (million barrels per day) in March, up from 2.43 mbpd in February but remaining at one of the lowest levels since 2021. Over Q1 as a whole, oil production fell 9.2% year on year, steeper than the 4.1% decline on average last year.

Oil production is expected to fall at a similar pace to last year this year. Output will be weighed on by a voluntary 0.14 mbpd cut in place since January and set to last until June. These cuts could be extended, posing a downside risk to the outlook. Looking further ahead, our panelists expect oil production to rise from 2025 onward; the government said in March it is still seeking to raise output capacity to 4.0 mbpd by 2035.

Meanwhile, refined fuel production is set to boom again in 2024, after the Al-Zour refinery—the second-largest in the Middle East—fully opened in late 2023. Output is currently at 1.4 mbpd, according to comments by the head of the national oil firm made in March, and is expected to rise “soon” to 1.6 mbpd.

On the new Al-Zour refinery, analysts at Fitch Solutions commented:

“The new 615,000 b/d Al Zour refinery is set to be one of the largest refineries in the world, having begun phase one commercial operations enabling roughly 200,000 b/d of production in late 2022. The production of low sulphur fuel oil for domestic power generation will account for 40% of the refinery’s output, whilst the remaining 60% will be dedicated to the production of ultra-low sulfur diesel, kerosene, jet fuel and naptha for export purposes.”

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