Kuwait Oil Sector Reels from Prolonged Strait of Hormuz Closure
Kuwait's oil sector has been severely impacted by the prolonged closure of the Strait of Hormuz due to the conflict between the US and Iran. The country, which depends heavily on oil revenue, has seen a sharp decline in crude exports and production.
According to official estimates, Kuwait's economy contracted 4.6% year-on-year in the first quarter of 2026, with oil-sector GDP falling by 12.5%. This is attributed to the disruption of the Strait of Hormuz, which has sharply reduced Kuwait's ability to export crude.
Kuwait's oil production declined to about 1.2 million barrels per day in March from 2.58 million barrels per day in February, and further fell during April and May as storage capacity filled. The state oil company reported damage and injuries following an attack on an oil facility, and the corporation declared a state of emergency shortly after the conflict began.
Kuwait's chief executive, Sheikh Nawaf Saud Al-Sabah, stated that the industry could recover quickly once the Strait of Hormuz is fully reopened. However, the disruption has also raised concerns about Kuwait's wider economic outlook, with economists predicting a 8.1% contraction in 2026 and a strong rebound in 2027 if shipping and oil production normalize.