Gulf countries shrink oil production as Iran missiles keep flying
Kuwait oil depot (Photo: REUTERS/Nicolas Economou/File Photo)
The state-owned Kuwait Petroleum Corporation (KPC) and has begun cutting production and declared force majeure, Reuters reported on March 7.
This news follows earier Iraq and Qatar announcements of cuts in oil and gas production. Analysts predicted that the United Arab Emirates and Saudi Arabia will also soon be forced to cut production, as they are running out of oil storage capacity.
KPC noted that it declared force majeure due to clear threats from Iran regarding the safe passage of vessels through the Strait of Hormuz, the continuation of Tehran's attacks on Kuwait, and an "almost total lack" of vessels capable of transporting oil and petroleum products in the Persian Gulf.
The corporation declared force majeure after it reduced crude oil production and refining due to the conflict in the Middle East.
The document did not specify exactly how much KPC will cut production: in February, Kuwait produced about 2.6 million barrels per day. The Kuwaiti corporation noted that the cut is a preventive measure and will be reviewed according to the development of the situation, and stated its readiness to restore the production level when conditions allow.
KPC is a major exporter of naphtha (an oil fraction used for gasoline production and the petrochemical industry) to Asia and a major supplier of aviation fuel to northwestern Europe.
The Bahraini company Bapco Energies also declared force majeure due to Iranian shelling and a strike on its oil refinery, Bahrain News Agency reported.
Bapco is Bahrain's main oil refining company and a key enterprise in its energy sector. It owns an oil refinery with a capacity of about 400,000 barrels per day.
The International Energy Agency warned that the significant surplus in the global oil market, which persisted since early 2025, could turn into a deficit due to military actions in the Persian Gulf.
Disruptions in oil transportation through the Strait of Hormuz have forced producers to start scaling back production.
Force majeure is a provision in contracts that exempts parties from liability if the failure to fulfill supply obligations is caused by events beyond their control.
Middle East escalation
Israel and the U.S. announced attacks on Iran — operations codenamed Lion's Roar (Israel) and Epic Fury (U.S.) on Feb. 28.
Numerous explosions rang out in Tehran and a number of other major Iranian cities. Later, the Israel Defense Forces confirmed that Ayatollah Ali Khamenei was killed as a result of an attack on his residence, which was completely destroyed, on the morning of Feb. 28. The death of the commander-in-chief of the Islamic Revolutionary Guard Corps (IRGC), Mohammad Pakpour, was also confirmed. According to the IRNA agency, the chief security advisor to Iran's supreme leader, Ali Shamkhani, was also eliminated in the attack.
In response to the attack, Iran launched ballistic missiles at Israel. Also, Iranian missiles and drones attacked U.S. military bases in Qatar, the UAE, Bahrain, Kuwait, Saudi Arabia, and Jordan. In particular, numerous explosions were reported in Dubai, Abu Dhabi, and Riyadh.
On March 2, 2026, 150 tankers anchored at once in the Persian Gulf. Deliveries of oil and LNG were halted.
The halting of tankers in the Persian Gulf raised the price of gas to a record high.
At the same time, the U.S. stated that Iran has not blocked the Strait of Hormuz.
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