Saudi Arabia, Kuwait to Resume Oil Production at Oilfields in Neutral Zone

Saudi Arabia and Kuwait's jointly operated oilfield at Khafji is expected to produce around 320k bpd by the end of next year, as confirmed

Arslan Butt•Thursday, December 26, 2019•1 min read

Crude oil fields in Neutral Zone between Saudi Arabia and Kuwait

Saudi Arabia and Kuwait’s jointly operated oilfield at Khafji is expected to produce around 320k bpd by the end of next year, as confirmed by Saudi energy minister. Prince Abdulaziz bin Salman announced the resumption of operations at the oilfield complex on Wednesday after singing a deal to end the dispute with Kuwait.

Khafji oilfield is located in the Neutral Zone which is shared between the two nations and had stopped oil production around five years ago. Prince Salman also confirmed that both Saudi Arabia and Kuwait will also resume crude production at Wafra. Prior to the dispute, these oilfields had a daily output of around 500k bpd, accounting for around 0.5% of the global oil supply.

Kuwait’s oil minister Khaled al-Fadhel was also in attendance at the signing ceremony which took place on Tuesday. However, both ministers confirmed that resumption of oil production at these facilities will remain in keeping with recently announced curbs in crude supply by OPEC and its allies.

At it latest meeting held earlier this month, OPEC+ nations had agreed to cut crude production by up to 2.1 million bpd, roughly 2% of world’s oil supply, to offset falling demand for crudeo oil which had weakened prices for most of 2019.

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Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.