The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply.
Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details.
Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.”
Photo: Reuters
The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas, to maritime traffic following Iranian threats to shipping. That has clogged up exports from the world’s top oil-producing region and helped drive prices in London to the highest close in more than two years at almost US$93 a barrel, sending consumers searching for alternatives and threatening to push global inflation higher.
Kuwait’s oil cutback started with about 100,000 barrels a day as of early Saturday and was expected to almost triple yesterday, with further gradual reductions depending on storage levels and the status of Hormuz, a person with direct knowledge of the plan said, asking not to be named, because the details are private.
The UAE, which pumped more than 3.5 million barrels a day as OPEC’s third-biggest producer in January, is using export capacity that bypasses the Strait of Hormuz and its international storage facilities to ensure supply to global markets.
ADNOC operates a 1.5 million barrel-a-day pipeline to Fujairah on the UAE’s western coast to avoid the Hormuz Strait.
The company said its onshore operations are continuing normally.
Cutbacks by the two OPEC members follow a swathe of others in the region. Iraq started holding back production earlier last week as storage tanks started filling up, while Saudi Arabia shut its biggest refinery, and Qatar closed the world’s largest liquefied natural gas export plant after drone attacks.
Kuwait Petroleum declared force majeure — a legal clause allowing a company not to fulfill contractual obligations because of circumstances outside its control — on sales of oil and refinery products, according to a notice seen by Bloomberg.
The country produced about 2.57 million barrels a day of oil in January, data compiled by Bloomberg showed.
The only route out for the supply is through the Strait of Hormuz. Saudi Arabia, the biggest producer in the region, has diverted some of its crude away from this route toward Yanbu in the Red Sea.
Kuwait had earlier begun lowering processing rates at its refineries because of the fuller tanks. The nation’s plants — Al-Zour, Mina al-Ahmadi and Mina Abdullah — have a combined capacity of about 1.4 million barrels a day. Al-Zour is one of the biggest oil-processing facilities in the Middle East.
US President Donald Trump said he expected crude prices to drop at the end of the war, which he called a “minor excursion” that was likely to continue “for a little while.”
“We figured oil prices would go up, which they will,” Trump told reporters aboard Air Force One on Saturday. “They’ll also come down. They’ll come down very fast, and we will have gotten rid of a major, major cancer on the face of the Earth.”
On Friday, US gasoline prices rose to the highest since September 2024. US crude futures ended the week above US$90 a barrel — more than US$20 higher than the previous week — and notched the biggest weekly percentage gain on record in data going back to the 1980s.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
Memory chip stocks extended their losses yesterday after Alphabet Inc’s Google publicized research that could allow more efficient use of the storage needed for artificial intelligence (AI) development. SK Hynix Inc and Samsung Electronics Co, South Korean leaders in the market, fell more than 6 percent and about 5 percent respectively in Seoul. In the US, Micron Technology Inc, Western Digital Corp and Sandisk Corp slid more than 2 percent in pre-market trading, after they all closed lower on Wednesday. Memory companies have been on a tear in recent months as the rapid development of AI infrastructure triggered a spike in chip
RSS