Kuwait Economy

Sources and analysts said Kuwait intends to increase exports of refined petroleum products from the new Al-Zor refinery in the second half of 2023 to fill a shortage of Russian oil in Europe and meet growing demand in Asia and Africa.

The refinery has a capacity of 615,000 barrels per day. It is one of several new complexes being commissioned this year around the world to pump more oil after supplies from Russia, one of the biggest exporters, have dwindled.

Kuwait has been increasing its exports of oil products to Europe, Africa, Asia and the United States after Western sanctions against Russia changed global energy trade routes.

Until the refinery is fully operational, OPEC member Kuwait is expected to reduce crude exports and increase exports of products, sources said.

The Al-Zour refinery, designed to refine medium-heavy crude oil, started operating its first crude distillation unit with a capacity of 205,000 barrels per day in September and is currently operating at 70 to 80 percent capacity, a source told Reuters. Efficiency, with consistent production.

Consultancy firm FGE expects the refinery’s second crude distillation unit to start operating in March or April, while the third unit is expected to start operating by August. Three filtration units are of the same capacity.

Exports of key refined products from Kuwait reached 17 million barrels in January, up 30% year-on-year, as exports of fuel oil and diesel and jet fuel to the Singapore Strait increased, according to Kepler data. For Europe, naphtha fuel for China, South Korea and Japan.

The Al-Zour refinery is operated by Kuwait Integrated Petroleum Industries, a subsidiary of Kuwait Petroleum Corporation, which did not immediately respond to a request for comment.

Diesel and jet fuel

The Al-Zour refinery is involved in producing diesel that meets European specifications, a source said. Annual diesel exports could reach seven million tonnes (143,000 barrels per day), while jet fuel exports could reach 4.5 million tonnes (97,000 barrels per day) once the refinery is fully operational.

According to trade sources and Kpler data, most diesel supplies go to Europe, with exports to the US and Oceania increasing.

The first source said that major oil companies, which are suffering from a shortage of supplies in Europe after the embargo on Russian oil, are keen to increase Kuwaiti exports.

According to Refinitiv’s estimate, Europe suffers from a shortage of Russian diesel of about three million tons per month (745 thousand barrels per day) after the EU ban.

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