Kuwait's oil export dynamics have undergone a transformation, shifting from crude oil to refined petroleum products. The shift is attributed to the expansion of the country’s refining capacity, according to data in the US Energy Information Administration (EIA)’s recently updated Country Analysis Brief.
In June and July 2023, Kuwait's export of petroleum products and liquefied petroleum gas (LPG) reached a record high of over 1 million b/d. In contrast, crude oil exports during the same period averaged around 1.6 million b/d, down from an average of 1.8 million b/d in the same period of 2022.
As of July 2023, refineries in Kuwait had capacity to process 1.4 million b/d of crude oil, more than double the January 2021 capacity of 600,000 b/d. The increase comes from the new Al Zour refinery and an expansion project at existing refineries over the past 2 years, according to the EIA.
Kuwait’s Al Zour refinery is the Middle East’s largest with a capacity of 615,000 b/d among three units. The plant’s first crude oil distillation unit came on line in November 2022, followed by the second in March 2023, and the third in July 2023. The Al Zour refinery can produce significant amounts of low-sulfur fuel oil, around 220,000 b/d at full capacity.
In late 2021, Kuwait's national refining company, Kuwait National Petroleum Corp. (KNPC), completed its Clean Fuels Project (CFP), an initiative aimed at upgrading and integrating the company’s Mina Al-Ahmadi and Mina Abdullah refineries to be able to process petroleum products with low levels of sulfur and nitrogen oxide. The upgrade allowed production of fuels that meet the Euro 4 and 5 standards for products with lower emissions. The CFP increased Kuwait’s crude oil refining capacity by around 60,000 b/d.
Kuwait’s crude oil exports fell to less than 1.8 million b/d for the first 7 months of 2023 from an average of 1.9 million b/d in 2022. By July 2023, crude oil exports dipped to 1.5 million b/d, according to Kpler tanker tracking service.
In July 2023, Asia continued to be the top destination for Kuwait's petroleum product exports, accounting for 46% of the total. However, Europe witnessed a substantial increase in its share, receiving 29% of these exports in July 2023, a notable rise from the 11% recorded in July 2021. This surge in European imports can be attributed to the European Union (EU)'s embargo on Russian imports, prompting EU nations to seek alternative sources for diesel and other products previously obtained from Russia, the EIA noted.