APPEC: Kuwait preparing for long US-Iran disruption, plans to buy more ships

Kuwait Petroleum Corp. is preparing for a long period of trade-flow disruption amid the ongoing US-Iran conflict, and plans to boost its own ship fleet to have better control over its supplies, a company executive said at APPEC 2026 in Singapore Sept. 8.

Trade-flow and production disruptions may increase costs and complicate delivery schedules, but KPC intends to uphold supply commitments to customers in the neighboring region and Northwest Europe, KPC's managing director of international marketing, Shaikh Khaled Al-Sabah, said during a presentation at APPEC hosted by S&P Global Energy over Sept. 7-10 in Singapore.

The industry should "expect the worst and hope for the better," he said.

Kuwait is dependent on the Strait of Hormuz to supply its crude and refined shipments. But with traffic via the strait down amid Iranian attacks on ships crossing the chokepoint, Kuwait's crude exports were only about 375,000 b/d in August, compared with 1.2 million b/d in February before the war began, according to S&P Global Commodities at Sea data.

Kuwait is also a major refined products supplier, with its product exports at 174,000 b/d in August, led by jet fuel and kerosene, compared with 847,000 b/d in February, CAS data showed. Kuwait is a major jet fuel supplier to Europe.

Kuwait's crude oil production fell to 1.7 million b/d in August, from 2.58 million b/d in February, according to the latest Platts OPEC+ survey by S&P Global Energy.

Sabah said KPC maintained and adjusted operations through the early phase of the conflict, initially keeping refinery runs at minimum viable levels when the disruption was widely expected to be brief, then ramping up efforts to meet customer needs as the situation continued. Kuwait operates the 615,000 b/d Al Zour refinery.

Sabah said that regional energy trade, especially from the Gulf region, cannot be replaced seamlessly when freight, insurance, and routing become constrained.

Rerouting cargoes

Alternative sourcing and rerouted cargoes can help in some cases, but they do not remove the structural problem, he said.

When shipping channels are disrupted, oil and refined products can get stuck despite production remaining available, Sabah added. That, in turn, can restrict refinery runs globally and tighten product availability as the market moves into seasonal peaks, he said.

As a result, KPC will emphasize supply resilience through logistics control and additional infrastructure, he said.

KPC is focusing on acquiring more of its own ships to reduce dependence on external ship availability and improve scheduling control when trade flows become volatile, he said.

"Controlling your own fleet" is a way to gain an operational lead over others when cargo movement becomes difficult, he added.

KPC is also pursuing pipeline options, described as east-to-west routes through neighboring countries, to create alternative pathways for exports when normal corridors face heightened risk or when loading is disrupted, according to Sabah.

He also pointed to building additional storage, enabling KPC to buffer cargoes, manage inventory timing, and keep sales moving even when direct loading and routing are interrupted.

Overall, Sabah said the company is moving from short-term crisis handling toward a longer-term operating model.

He said that KPC will keep ports and sales open now, but invest in fleet, pipelines, and storage so that the company — and its Arab Gulf customer base — can navigate prolonged disruption without losing control of exports and delivery terms.