Kuwait just threw cold water on the market’s optimism about a quick oil supply snapback. Kuwait Petroleum Corporation says it will take 10 to 12 weeks to fully restore oil production once the Strait of Hormuz reopens, a timeline that is meaningfully longer than what many energy traders have been pricing in.
The estimate came from KPC’s managing director for international marketing, Shaikh Khaled Ahmad Al-Sabah, speaking at the S&P Global Energy Middle East Petroleum and Gas Conference on June 3. In English: even if the Strait opens tomorrow, the world won’t see Kuwait’s full oil output until sometime in August or September.
The recovery math doesn’t add up to quick
Here’s the breakdown. KPC expects to reach roughly 70% of normal production levels within six to eight weeks of Hormuz reopening. The remaining 30% would take about another month on top of that.
Refinery operations, at least, are the bright spot. KPC projects those will return to normal in just two to three weeks. The company operates around 1.4 million barrels per day of refining capacity.
