Kuwait nearly triples crude output to 1.65M bpd in June

Kuwait's crude production surged to 1.65 million barrels per day in June, nearly three times May's level, as the US-Iran ceasefire reopened Gulf shipping lanes.

Kuwait's crude output jumped to 1.65 million barrels per day in June from 578,000 bpd in May, a source familiar with the matter said, as the US-Iran interim peace deal reopened the Strait of Hormuz and allowed Gulf producers to ramp up exports.

"Daily production rose to as high as 1.9 million bpd in the last 10 days of June," the source said, speaking on condition of anonymity because the data has not been publicly released.

The June figure remains well below Kuwait's pre-war capacity of about 2.5 million bpd, but the rapid recovery has already added pressure to crude prices. WTI crude fell 1.3% to $67.69 a barrel Thursday, while Brent settled near $70.72, as traders priced in the return of Persian Gulf supply. OPEC's overall May production had fallen to a 40-year low of 16.33 million bpd as the Iran conflict shut in millions of barrels.

The production surge threatens to accelerate a return to the oversupplied market that analysts had forecast before the war. The International Energy Agency now expects global oil demand to decline by 1.1 million bpd this year, while Wall Street strategists have begun lowering price targets — Brent expectations for 2026 now average $84.50, down from $90.44 a month ago.

Kuwait's ramp-up mirrors a broader normalization across the Gulf following the Feb. 29 US-Israeli airstrikes that triggered the conflict and the subsequent closure of the Strait of Hormuz. The waterway, through which roughly 15 million bpd of crude had flowed before the war, has gradually reopened under a tenuous ceasefire agreement. President Trump said Tuesday that peace talks are set to resume in Doha.

Supply Recovery Outpaces Demand

The production increase comes as OPEC faces internal strains over output policy. Iraq warned last month it might quit the cartel if it does not receive a higher quota, while OPEC delegates had previously outlined plans to continue restoring halted production through September. Kuwait's rapid output recovery — from less than a quarter of its pre-war capacity in May to nearly two-thirds in June — illustrates how quickly supply can return once shipping routes are secure.

For global crude markets, the question is whether the supply rebound will outpace the demand destruction caused by the war. The IEA has warned that the conflict's impact on consumption will be deeper than previously anticipated, cutting its 2026 demand forecast by more than half from an earlier estimate of a 420,000 bpd decline. US crude production, meanwhile, continues to rise — the Energy Department raised its 2026 estimate to 13.72 million bpd, and the active US oil rig count climbed to a one-year high of 440 last week.

"If the past four months have reinforced one lesson, it is that commodity markets always clear," said Natasha Kaneva, head of commodities research at JPMorgan. "But the path they take to get there is what determines where prices ultimately settle."

This article is for informational purposes only and does not constitute investment advice.