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Kuwait crude oil production at 2.8 million b/d, highest since December 2016: minister

London — Kuwait's crude oil production currently stands at 2.8 million b/d, the country's oil minister Bakheet al-Rashidi said Wednesday, up about 90,000 b/d from June levels.

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That would be the highest since December 2016, the last month before OPEC's supply cut agreement went into force, when Kuwait reported production of 2.84 million b/d.

OPEC is set to reveal its July production figures in its closely watched monthly oil market report August 13.

The producer group on June 23 agreed with Russia and nine other allies on a 1 million b/d output increase to head off any supply shortages emerging from US sanctions on Iran and Venezuela's continued decline, among other market disruptions.

OPEC has not said how those extra barrels will be allocated among its members.

In comments to Kuwait's Al-Rai newspaper, Rashidi said: "We are reaching a very stable stage for the crude market, whether for producers or consumers."

He added that he was optimistic that crude production in the Neutral Zone shared by Kuwait and Saudi Arabia could resume soon.

S&P Global Platts reported last month that the two countries were aiming for a December restart of production at the fields, which could bring up to 500,000 b/d to the market at a time when many analysts expect global supplies to be tight.

Rashidi is expected to meet with Saudi energy minister Khalid al-Falih in November to discuss the issue.

Crude output in the Neutral Zone fields is shared equally between Saudi Arabia and Kuwait.

The Khafji field is part of the Al-Khafji Joint Operations, owned 50:50 by Saudi Arabia's Aramco Gulf Operations Co. and Kuwait Gulf Oil Co.

Aramco, the field's operator, unilaterally shut production down in October 2014, citing new government emissions standards for gas flaring.

Japan's Toyo Engineering earlier this month said it had been retained to begin preparations for a restart of Khafji in early 2019.

The Wafra field is operated by KGOC and Saudi Arabian Chevron, and was shuttered in May 2015, with Chevron saying it had encountered difficulties in securing work and equipment permits.

As for the threat of closures to the vital Strait of Hormuz, Rashidi said that Gulf countries "have plans ready for implementation in emergencies," without elaborating.

Iran has threatened to prevent other Middle East producers from exporting their crude through the strait if Iran's own exports are shut in due to US sanctions, which were supported by many Gulf Arab countries.

Some 18.5 million b/d of oil shipments transit the strait at the tip of the Persian Gulf, according to the US Energy Information Administration.

Saudi Arabia last week suspended its shipments through the Bab al-Mandab strait between the Gulf of Aden and the Red Sea, after it said Yemeni Houthis attacked two of its tankers.

Houthi authorities late Monday announced a two-week halt to its military activities in the Red Sea, unless the Saudi-led coalition seeking to oust the Houthis from Yemen escalates its attacks.

Saudi Arabia has accused its chief geopolitical rival Iran of backing the Houthi forces, a charge Tehran has denied.

--Herman Wang, herman.wang@spglobal.com

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com