Kuwait set to launch oil firm mergers within restructuring in Q2 2025

OPEC producer Kuwait will soon launch plans to merge some of its state oil companies as part of a restructuring programme intended to boost performance and cut costs.
The Kuwait Petroleum Corporation (KPC), which manages the Gulf country's hydrocarbon sector, will oversee the restructuring plan, which has been approved by the cabinet and the Supreme Petroleum Council.
In a report this week, the Arabic language daily Alseyassah said the first merger process involves the Kuwait National Petroleum Company (KNPC) and the Kuwait Integrated Petrochemical industries Company (KIPIC).
It said the merger of the two KPC-affiliated firms could begin at the start of the 2025-2026 fiscal year, which begins on April 1.
The Kuwaiti daily Alanba said in 2024 that KNPC has devised plans for the merger of 4 of its subsidiaries and that the process would start at the end of March.
It said the merger would involve KIPIC with KNPC and the Kuwait Oil Company (KOC) with the Kuwait Gulf Oil Company (KGOC), which manages Kuwait's oil interests in the Neutral Zone shared by Saudi Arabia and Kuwait.
(Editing by Anoop Menon) (anoop.menon@lseg.com)

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Zawya

6 hours ago

• Zawya

Oil to open higher as US strikes on Iran boost supply risk premium

LONDON: Oil is likely to rise by $3-5 per barrel when trading resumes on Sunday evening after the U.S. attacked Iran at the weekend, market analysts said, with gains expected to accelerate only if Iran retaliates hard and causes a major oil supply disruption. U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes overnight, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran is OPEC's third-largest crude producer. "An oil price jump is expected," said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official. "Even in the absence of immediate retaliation, markets are likely to price in a higher geopolitical risk premium." Global oil benchmark Brent crude could gain $3 to $5 per barrel when markets open, SEB analyst Ole Hvalbye said in a note. Brent settled at $77.01 a barrel on Friday and U.S. West Texas Intermediate at $73.84. Ole Hansen, analyst at Saxo Bank, said crude could open $4 to $5 dollars higher, with potential for some long positioning being unwound. Crude had settled down on Friday after the U.S. imposed fresh Iran-related sanctions, including on two entities based in Hong Kong, and counter-terrorism-related sanctions, according to a notice on the U.S. Treasury Department website. Brent has risen 11% while WTI has gained around 10% since the conflict began on June 13 with Israel targeting Iran's nuclear sites and Iranian missiles hitting buildings in Tel Aviv. Currently stable supply conditions and the availability of spare production capacity among other OPEC members have limited oil's gains. Risk premiums have typically faded when no supply disruptions occurred, said Giovanni Staunovo, analyst at UBS. "The direction of oil prices from here will depend on whether there are supply disruptions - which would likely result in higher prices - or if there is a de-escalation in the conflict, resulting in a fading risk premium," he said. A senior Iranian lawmaker said on June 19 that the country could shut the Strait of Hormuz as a way of hitting back against its enemies, though a second member of parliament said this would only happen if Tehran's vital interests were endangered. About a fifth of the world's total oil consumption passes through the strait. SEB said any closure of the strait or spillover into other regional producers would "significantly lift" oil prices, but they saw this scenario as a tail risk rather than a base case given China's reliance on Gulf crude. Ajay Parmar, oil and energy transition analytics director at consultancy ICIS, said it was unlikely Iran would be able to enforce a blockage of the strait for too long. "Most of Iran's oil exports to China pass through this strait and Trump is unlikely to tolerate the inevitable subsequent oil price spike for too long - the diplomatic pressure from the world's two largest economies would also be significant," he said. (Reporting by Anna Hirtenstein, Ahmad Ghaddar, Robert Harvey and Seher Dareen in London, Arunima Kumar in Bengaluru, editing by Alex Lawler, Clelia Oziel and Giles Elgood)

Khaleej Times

7 hours ago

• Khaleej Times

Israel-Iran conflict: What is the Strait of Hormuz? Why is it so important for oil?

[Editor's Note: Follow our live blog for real-time updates on the latest developments in the Israel-Iran conflict.] Iran's top security body must make the final decision on whether to close the Strait of Hormuz, Iranian TV said on Sunday, after parliament reportedly backed the measure in response to US strikes on several of Tehran's nuclear sites. Iran has in the past threatened to close the strait but has never followed through on the move, which would restrict trade and impact global oil prices. Below are details about the strait: What is the Strait of Hormuz? The strait lies between Oman and Iran and links the Gulf north of it with the Gulf of Oman to the south and the Arabian Sea beyond. It is 21 miles (33 km) wide at its narrowest point, with the shipping lane just 2 miles (3 km) wide in either direction. Why does it matter? About a fifth of the world's total oil consumption passes through the strait. Between the start of 2022 and last month, somewhere between 17.8 million and 20.8 million barrels of crude, condensate and fuels flowed through the strait daily, data from analytics firm Vortexa showed. OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, mainly to Asia. The UAE and Saudi Arabia have sought to find other routes to bypass the strait. About 2.6 million barrels per day (bpd) of unused capacity from existing UAE and Saudi pipelines could be available to bypass Hormuz, the U.S. Energy Information Administration said in June last year. Qatar, among the world's biggest liquefied natural gas exporters, sends almost all of its LNG through the strait. The U.S. Fifth Fleet, based in Bahrain, is tasked with protecting commercial shipping in the area. History of tensions In 1973, Arab producers led by Saudi Arabia slapped an oil embargo on Western supporters of Israel in its war with Egypt. While Western countries were the main buyers of crude produced by the Arab countries at the time, nowadays Asia is the main buyer of OPEC's crude. The U.S. more than doubled its oil liquids production in the last two decades and has turned from the world's biggest oil importer into one of the top exporters. During the 1980-1988 Iran-Iraq War, the two sides sought to disrupt each other's exports in what was called the Tanker War. In July 1988, a U.S. warship shot down an Iranian airliner, killing all 290 aboard, in what Washington said was an accident and Tehran said was a deliberate attack. In January 2012, Iran threatened to block the strait in retaliation for U.S. and European sanctions. In May 2019, four vessels - including two Saudi oil tankers - were attacked off the UAE coast, outside the Strait of Hormuz. Three vessels, two in 2023 and one in 2024, were seized by Iran near or in the Strait of Hormuz. Some of the seizures followed U.S. seizures of tankers related to Iran.

Arabian Post

2 days ago

• Arabian Post

China's Iran Oil Bet Hits Strategic Snag

China is confronting significant disruption to its Iranian crude oil supply, risking both its energy security and geopolitical ambitions in the Middle East. With over 90 per cent of Iran's oil exports directed to China via Kpler, the contraction of that flow places Beijing's $400 billion 2021 cooperation deal in jeopardy. Major Chinese independent refiners, the so‑called 'teapots' in Shandong province, are enduring mounting losses as deepening discounts on Iranian oil clash with soaring global prices. Discounts have widened to between $3.30 and $3.50 a barrel against ICE Brent for July cargoes – up from approximately $2.50 in June – contributing to refinery utilisation dropping to around 51 per cent, down from 64 per cent a year ago. Despite Israel's airstrikes targeting Iranian energy infrastructure and concerns over potential U.S. sanctions, Iran has maintained its exports through a shadow tanker fleet and strategic logistics adjustments. Kpler reports that crude loadings have reached a five‑week high of about 2.2 million barrels per day, assisted by the use of a less exposed jetty on Kharg Island and pre‑positioning of floating stocks nearer to China – including approximately 8 million barrels stationed offshore China. ADVERTISEMENT In 2024, Iranian shipments to China peaked at 1.6 million barrels per day, but that volume had already declined to roughly 740,000 bpd by April 2025, as broader Middle East instability and tightening sanctions exerted pressure. Rival supplies from OPEC+ producers like Saudi Arabia and the UAE may partially compensate, yet analysts emphasise that prolonged disruption would still erode Beijing's strategic leverage and diplomatic role in the region. For China, this dependence on Iranian crude is part of a broader ambition to deepen its influence across the Middle East as a counterweight to the West. The initial rationale behind the 25‑year deal encompassed energy security, infrastructure projects, trade expansion, and regional diplomacy. But the conflict's escalation threatens those objectives, undermining China's established pipeline for cheap oil and complicating its efforts to mediate regional tensions. Economists note the urgency for Beijing to accelerate its shift toward renewable energy and domestic self-reliance. China had already reached a milestone with renewables comprising 56 per cent of its electricity capacity in 2024. The current moment has intensified calls to reduce external vulnerabilities and accelerate electrification. At present, the Chinese government has refrained from military engagement, calling for de-escalation and abstaining from direct intervention in support of Iran. Instead, it is pursuing regional diplomacy while guarding its considerable investments. A Chinese foreign ministry spokesperson emphasised the need to 'prevent the region from spiralling into greater turmoil', particularly to secure stable energy imports. However, should the conflict deepen, or if key Iranian oil infrastructure suffers irreparable damage, China's reliance on opaque supply routes and shadow trading may no longer suffice. Its medium‑term strategy of presenting itself as a credible peace broker in the Middle East faces growing strain amid diverging interests between Iran and Gulf states. China appears poised to rely more heavily on Gulf crude, yet that reliance comes with its own geopolitical calculations. Riyadh and Abu Dhabi together hold significant spare capacity – over 4 million barrels per day – which may cushion global shocks but do little to salvage China's ambition to sustain influence via energy partnerships. The unfolding developments in the Israel–Iran arena have exposed strategic fissures in a partnership that once appeared unshakeable. Even as Iran adapts tactically to maintain its export pipeline to China, Beijing must confront the reality that maintaining influence in the region demands resilience beyond discounted barrels and shadow fleets.