Kuwait has not sent any crude oil to the United States for at least four weeks, EIA’s weekly petroleum reports for the last four weeks, which also include a weekly comparison, have revealed.
The last week that saw Kuwaiti crude coming into the United States was August 24th, when 49,000 bpd were received at U.S. ports. This compares with 214,000 bpd a year earlier, suggesting that Kuwait is reorienting itself to the more lucrative Asian markets, Bloomberg reports, having calculated that Kuwaiti crude costs an average of US$80 a barrel in Asia, which is a dollar more than it costs in the United States.
Kuwaiti oil is predominantly high-sulfur, which is what a lot of Asian refineries prefer to process and are willing to pay more for it, a source in the know told Bloomberg, asking to not be identified.
So far so good for Kuwait, which is a relatively small producer, but the emirate is facing a production cap, Bloomberg notes, because of an ongoing dispute with ally Saudi Arabia about the fields that they share in the so-called neutral zone. On Sunday, Saudi Arabia’s Crown Prince Mohammed went on a visit to Kuwait to discuss the topic in light of growing pressure on Middle Eastern producers to ramp up production to offset a loss of supply caused by the U.S. sanctions against Iran.
Joint oil production in the neutral zone was suspended in 2015, but earlier this month the Financial Times reported that the two countries were mulling over a restart amid rising oil prices and the matching rise in worry among large oil buyers.
The neutral zone, the FT reported at the time, could be pumping half a million barrels daily in a few months, according to the International Energy Agency, which would add to more than 10 million bpd of Saudi production and almost 3 million bpd on Kuwaiti production based on the latest figures for July.
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Irina Slav is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.
Featured image is from OilPrice.com.