'No substitute': Kuwait's future tied to Hormuz strait fate

Kuwait's once prosperous oil sector has stood largely paralysed for months, with petroleum exports plummeting as fighting raged across the Gulf - triggering the country's largest crisis in decades.

Half a year into the war, Kuwait remains a hostage to its uncompromising need to access the Strait of Hormuz -- where the war between the US and Iran has choked off the once plentiful energy exports that moved across its waters.

Oil has long been the bedrock for the tiny Gulf state's economy - where more than 90 percent of government revenue and nearly all export earnings rely on reliable crude sales. The country is also home to roughly six percent of total oil reserves globally.


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Unlike Saudi Arabia or the United Arab Emirates, Kuwait has no pipelines bypassing the strait - forcing its crude exports to sail through the contested waterway to the international market.

"Without a doubt, this is the toughest and biggest crisis that we have faced in the oil sector in Kuwait since the 1990 invasion by Iraq," said Kuwait Petroleum Corporation (KPC) chief executive Shaikh Nawaf Saud Al-Sabah.

Then, as Saddam Hussein's forces retreated from a US-led onslaught to liberate Kuwait, the Iraqi army torched hundreds of wells, destroyed massive storage tanks and targeted refineries - causing catastrophic damage to much of the country's oil sector.

Crisis

Kuwait has been spared the same levels of destruction during this war but has not emerged unscathed.

Just days into the war, the state-owned KPC declared force majeure - a legal maneuver that protects an enterprise when they cannot meet their contractual obligations due to unforeseeable events, like wars and natural disasters.

The notice was lifted in June.

The country has also weathered repeated waves of Iranian strikes targeting water desalination plants and energy installations, including petroleum infrastructure along with salvos aimed at US military bases.

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"This crisis has presented us with a new challenge," Al-Sabah told AFP during an exclusive interview from a temporary office space he relocated to after KPC's headquarters was hit by a drone strike in April.

Before the war, Kuwait was producing slightly more than 2.6 million barrels of oil per day, with an ambitious plan to reach 4 million barrels daily by 2040.

"Once the strait is open, it reverts to free movement, then we can easily go back to our pre-war production levels and even higher," said Al-Sabah.

But when asked how much Kuwait was now able to deliver on a given day, the executive refused to provide a figure.

"It's something that - during this crisis - we prefer to keep to ourselves," he told AFP.

According to preliminary official data, Kuwait's economy contracted 4.6 percent year-on-year during the first quarter of 2026, with its oil-sector GDP collapsing by 12.5 percent.

The true toll is likely more damning, with available economic data only accounting for the first month of the conflict.

In our blood

Kuwaitis have largely remained resilient in the face of the war, despite Iranian attacks and talk of a Tehran-backed military buildup at the nearby Iraq-Iran border.

At night, lights at most of the country's major energy installations, including power stations and water plants, have been switched off.

Scaffolding has also been constructed around many of Kuwait's storage tanks -- where vast quantities of crude are held -- hoping to protect the structures from any future strikes.

"We have recovered from worse. We are Kuwait. Resistance is in our blood," Noura, 45, told AFP at the historic Al-Mubarakiya market.

But in private conversations, Kuwaitis are much more frank, with some criticising American forces or lambasting US President Donald Trump's willingness to continue the war.

Al-Sabah insists the company is working tirelessly to execute contingency plans and said storage tanks outside of the region have helped buffer the strait crisis.

But even with such plans, experts said the strait's fate remains crucial to Kuwait's future.

"Kuwait's dependence on Hormuz has become a strategic vulnerability," said Amena Bakr, head of Middle East insights at Kpler.

According to Bakr, estimates predict that Kuwait's oil production could likely be restored to pre-war levels in two to three months.

"The country does have financial resources to withstand a serious temporary shock," said Bakr.

"But the longer the war drags on, the more the economy is exposed to the risks of not having a safe export route for this oil."

But Al-Sabah warned there was "no substitute" for unfettered access to the strait.

"If you do not have free flow of hydrocarbons through the Strait of Hormuz and free navigation through the Strait of Hormuz, you will end up with another energy crisis very quickly," he said.