Kuwait has uncovered a substantial new oil and gas reserve in the Al-Nokhatha field, with an estimated 2.1 billion barrels of light oil and 5.1 trillion cubic feet of gas. This discovery holds the potential to significantly boost the country's oil reserves and future production capacity.
This find is pivotal for Kuwait's energy landscape as the nation plans to almost double its oil output from 2.4 million barrels per day to over 4 million barrels per day by 2035. Given that oil represents 91% of Kuwait’s export revenue, this discovery could enhance economic stability and growth, while highlighting the need for Kuwait to pursue economic diversification to ensure long-term sustainability.
Looking at exports, Kuwait primarily exports oil via tankers and does not have significant pipeline infrastructure either for crude or products exports. Kuwait's export data from January 2019 to June 2024 reveals a strategic shift from crude oil to refined petroleum products. Crude oil exports, which peaked at 10,124 kt in December 2019, were at 4,983 kt in March 2024 or 37.1% lower from the 2019-2023 average, while July exports are on track to remain even lower than March figures. In contrast, oil products exports have surged, with April figures at 2,929 kt or 86.6% higher than the 2019-2023 average.
Kuwait's transition from exporting crude oil to refined petroleum products is driven by strategic enhancements in its refining capacity, particularly with the Al-Zour refinery, which enables higher-value product exports like gasoline, diesel, and jet fuel. This shift is economically advantageous as refined products such as gasoline and diesel fetch higher market prices, boosting revenue. In terms of products volumes, jet fuel is consistently the largest export, followed by diesel and naphtha. At the other end of the trade, in both 2023 and 2024 so far, United Kingdom is the biggest importer of Kuwaiti products, with Jet fuel again dominating the trade. Additionally, other European countries like France, Netherlands, Belgium and Spain are dominating the imports, a fact that can be attributed to the European Embargo on Russian crude and products.
Looking at export growth between 2019 and 2023, Clean Petroleum Products (CPP) exports averaged a quarterly growth rate of 2.74%, while crude oil exports averaged a decline of 0.07%. Focusing on 2024 alone, CPP exports have so far averaged a quarterly growth of 5.39%, whereas crude oil exports have averaged a significant decline of 12.21% per quarter. It is evident that the shift towards increasing CPP exports is accelerating this year.
Shifting to volumes, crude oil exports from Kuwait averaged 5,587 kt in 2024 on a monthly basis or -29.5% lower than the 2019-2023 average, while CPP exports averaged 2,842 kt in 2024 or 81.0% higher than the 2019-2023 average.
Assuming that these trends will continue, with CPP exports maintaining their upward trajectory and crude oil exports gradually rebounding in light of the new field discovery, it is expected that overall exports out of Kuwait will increase, be it crude or clean products. This surge in exports is likely to drive higher demand for tankers in the region, particularly for MRs to accommodate the increased volume of refined products and Suezmaxes and VLCCs to facilitate crude oil volumes.
Data Source: Intermodal