UAE and Kuwait start oil output cuts after Hormuz blockage

Core Viewpoint - Kuwait has reduced oil and refinery production due to threats from Iran and disruptions in shipping traffic through the Strait of Hormuz, impacting major energy producers globally [3][5]. Group 1: Production Cuts - Kuwait initiated a cutback of approximately 100,000 barrels per day, which is expected to increase nearly threefold on Sunday, with further reductions contingent on storage levels and the situation in Hormuz [4]. - The country produced about 2.57 million barrels a day in January, with the only export route being through the Strait of Hormuz [7]. Group 2: Impact of Regional Conflict - The ongoing conflict in the Middle East has led to a near halt in maritime traffic through Hormuz, causing oil prices in London to reach nearly $93 a barrel, the highest in over two years [5]. - Iraq has also begun to limit production as storage tanks fill up, while Saudi Arabia has shut down its largest refinery and Qatar has closed the world's largest liquefied natural gas export facility due to drone attacks [5]. Group 3: Legal and Operational Measures - Kuwait Petroleum Corp. declared force majeure on oil and refinery product sales, allowing it to avoid fulfilling contractual obligations due to circumstances beyond its control [6]. - Kuwait has started lowering processing rates at its refineries due to increased storage levels, with a combined capacity of about 1.4 million barrels a day across its main facilities [8]. Group 4: Security Concerns - The country has faced significant threats from Iranian missiles and drones, impacting various locations including the US embassy and military bases [9].