State-owned producer Kuwait Petroleum Corp. is also delivering cargoes directly to customers, said Shaikh Khaled Al-Sabah, managing director for international marketing. The company is using its own tankers as well as chartered vessels to move oil, he said.
Kuwait’s crude shipments have recovered to almost two-thirds of the 1.6 million barrels a day it exported on average last year as more tankers find ways to navigate Hormuz. Exports had slumped to multiyear lows after the Iran war began in late February.
“We can supply all of our customers, but some volumes are not the same as before,” Shaikh Khaled said at the Asia Pacific Petroleum Conference by S&P Global Energy in Singapore. Buyers will have to pay more for KPC to deliver crude outside Hormuz to compensate for transit risks, while those taking cargoes inside the Persian Gulf will receive discounts, he added.
Estimates for daily flows through the Hormuz vary. Vitol Group Chief Executive Officer Russell Hardy put those at about 10 million barrels, including 9 million of crude, while Macquarie Group Ltd. estimated volumes at about 7 million barrels a day of crude and refined fuels. That’s still less than half the 20 million barrels a day that transited the waterway before the war.
Shipments are continuing even as renewed fighting between the US and Iran ended a period of relative calm, threatening fresh disruptions to energy flows through the waterway. The control of Hormuz remains a key point of contention. Iran has said an agreement with Oman to manage shipping through the strait is imminent.
Kuwait also plans to ramp up refinery runs to boost fuel supplies as markets for products including diesel remain tight, Shaikh Khaled said.
With Washington and Tehran in a stalemate, Persian Gulf producers are finding ways to ship oil to customers through one of the world’s most important energy corridors. Ship-to-ship transfers, the so-called shuttle trade, have become increasingly popular, while producers are also exploring pipelines that bypass Hormuz altogether.
Kuwait is evaluating alternative pipeline routes for crude exports, including through Saudi Arabia and the United Arab Emirates, Shaikh Khaled said.
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