Kuwait considers new oil storage hubs amid Gulf shipping crisis
(Bloomberg) – Kuwait will consider increasing oil storage abroad to boost its ability to supply global markets after the war in the Persian Gulf blocked flows through the Strait of Hormuz, according to the head of the state energy company’s marketing arm.
The strait isn’t safe to navigate with energy shipments even if it’s not fully blocked, said Sheikh Khaled Al Sabah, managing director of international marketing at Kuwait Petroleum Corp. The country will look at opportunities to store more oil abroad, and is speaking with neighboring states about potential pipeline alternatives, he said at the S&P Global Energy MPGC 2026 conference in London.
Kuwait, which is entirely reliant on sending tankers out of the Persian Gulf via Hormuz for its energy exports, struck deals in recent years to store modest amounts of its oil in South Korea and Japan. The company has sharply curtailed crude production during the current conflict, though it continues to run fields at minimum levels to avoid damage and allow for a quick return to normal, Sheikh Khaled said.
The US and Israeli campaign against Iran that began in late-February has led to unprecedented upheaval in global markets, with about a fifth of daily oil and gas supplies out the Gulf impacted and prices that have spiked by more than 35% since the start of the conflict. An uneasy ceasefire is dragging on, leaving Gulf countries uncertain about the future freedom of navigation of Hormuz and its viability as an export route.
Kuwait has continued selling some refined products to other countries within the Gulf, allowing it to keep operations running at some of its refineries, Sheikh Khaled said, without detailing activities at the country’s three facilities. Gulf countries are running plants to meet local demand and seeking to sell excess products they don’t use at home.
Kuwait can ramp its refineries back up to normal capacity within weeks of Hormuz reopening, while it can reach 70% of normal crude production levels within six to eight weeks, he said.
