Kuwait has stepped up efforts to store crude oil overseas as part of emergency plans designed to protect exports amid rising regional tensions and potential shipping disruptions through the Strait of Hormuz, according to a report by Al Rai Media.

The report said Kuwait currently stores between 7 million and 8 million barrels of crude oil in the Far East to ensure supply continuity during potential disruptions in Gulf shipping routes.

Kuwait Petroleum Corporation (KPC) activated emergency plans immediately after regional tensions escalated including storing crude in key Asian markets, withdrawing tankers from the Gulf and maximising tanker loading capacity to secure minimum strategic coverage

According to the report, approximately 3.5 million barrels are stored in Japan under an agreement with ENEOS and nearly 4 million barrels are held in South Korea in Ulsan

Although overseas storage involves transportation, financing and storage costs estimated previously at between $0.50 and $0.75 per barrel, the report said these expenses are considered justified compared with the potential losses associated with supply disruptions or reduced market share.

Al Rai Media added that Kuwait’s overseas storage agreements are structured strategically, often granting host countries priority access to stored crude during emergencies in exchange for favourable storage arrangements.
Source: Pulse