Sheikh Nawaf Saud Al-Sabah, Vice Chairman & CEO of the Kuwait Petroleum Corporation, stated that Kuwait‘s oil industry exists to both extract (crude oil from the ground) and recuperate (to bring back into service oil facilities damaged by conflict). At the Atlantic Council’s Global Energy Forum, Al-Sabah estimates that within 30 days of the end of the Iran-Iraq war, Kuwait would have reinstated the production capacity of approximately 80% of its crude oil production that was low because of the war, with the other production capacity coming back into the world supply chain over the next three to four months.
Throughout the war, Kuwait took the position that it would not produce any more oil than was necessary to meet its internal demand; however, it was still able to export refined fuels to its neighbours in the Middle East. This approach allowed for a degree of continuity in oil trade throughout the Gulf region during a time when it was highly unstable. Al-Sabah referred to this existing trade network as a connected energy network and indicated that the Gulf States are functioning less like independent commodity exporters than as members of a cooperative network.
The key message is to prioritise preparation. Following the Gulf War, Kuwait seeks to build upon the experiences gained from that conflict and use them as a basis for establishing an effective collaborative effort among the other GCC states on how they plan to cooperate on oil production and distribution. Kuwait is also looking into expanding its pipeline capacity for the purpose of more efficiently moving Kuwaiti crude oil to international markets through existing pipelines in Saudi Arabia and the United Arab Emirates.
In a region where shifts in geopolitical relations occur virtually overnight, possessing sufficient infrastructure can be equally important as possessing the crude oil reserves themselves.
During a meeting with U.S. Secretary of Energy Chris Wright in Washington, Kuwait further solidified its energy policies. Per KPC, the parties discussed the importance of developing a collaborative approach toward maintaining energy security, stable oil markets, secure supply chains, and safe passage through the Strait of Hormuz, which serves as one of the most critical passageways for oil transport in the world. For a member of OPEC, like Kuwait, the current oil market demands resilience not only with respect to how much crude may be produced but also in terms of how rapidly the overall system can return to stability after sudden changes occur.
