Kuwait produced 1.971 million barrels of crude oil per day in July, Reuters reported, citing unnamed sources. That figure represents a significant increase from 1.65 million barrels per day in June, which itself was a sharp rise from just 580,000 barrels per day in May. As one of OPEC's largest producers by capacity, Kuwait's recovery is a notable signal for global supply, yet its July output remains well below the roughly 2.7 million barrels per day the country sustained before the regional conflict disrupted Gulf shipping.

The report aligns with earlier coverage indicating that oil continues to move out of the Persian Gulf, a dynamic that could reinforce bearish sentiment among traders. However, oil flows through the Strait of Hormuz remain considerably below pre-war levels.

The news about Kuwait comes alongside OPEC+'s latest meeting, at which the group announced it would raise production targets by an additional 188,000 barrels per day starting in September. With this decision, OPEC+ effectively unwinds the final tranche of the production cuts it agreed to in 2023, which were designed to balance the market in a manner favorable to member states.

OPEC+ has been unwinding those cuts since spring, though most of the increase has existed only on paper, as the Strait of Hormuz blockade has prevented the normal flow of crude oil out of Gulf states. In theory, OPEC+ should produce 1.65 million barrels per day more in September than it did in 2023. In practice, achieving that level will prove challenging, as the security situation in the Persian Gulf is not significantly better than it was in March, although some tanker traffic has been reported.

Saudi Arabia, for example, has been forced to reroute its exports on two separate occasions — first diverting from the Strait of Hormuz to the Bab el-Mandeb strait in the Red Sea, and then rerouting from that southern chokepoint northward to the Suez Canal — because of threats from Yemen's Houthi forces.

Kazakhstan is also struggling to raise its output. In fact, Kazakh production is declining due to Ukrainian drone attacks on the Russian Black Sea port of Novorossiysk, which handles approximately 80% of Kazakhstan's oil exports. The attacks have caused repeated suspensions of oil flows through the Caspian Pipeline Consortium conduit, forcing Kazakhstan to cut production to roughly 1 million barrels per day in late July, down from over 2 million barrels per day in June. The divergent trajectories — Kuwait ramping up while Kazakhstan and others falter — underscore how security disruptions, rather than quota decisions, are increasingly determining which members can actually deliver barrels to market.

By Irina Slav for OilPrice.com