Kuwait pumped 1.65 million barrels per day in June, up from just 580,000 bpd in May. That’s a nearly threefold increase in a single month, and the highest production level the country has managed since the US-Iran conflict turned the Strait of Hormuz into a no-go zone earlier this year.
Kuwait was producing around 2.5 million bpd before the conflict erupted, meaning current output remains roughly 850,000 bpd below its pre-conflict baseline.
What actually happened
The story starts in late February 2026, when US and Israeli strikes on Iran triggered a cascade of retaliatory measures. Iran’s closure of the Strait of Hormuz, the narrow waterway through which roughly a quarter of the world’s seaborne oil trade transits, effectively choked Gulf oil exports.
Kuwait, along with other regional producers, was forced to slash output dramatically. Collectively, Gulf producers cut somewhere between 6.7 and 10 million bpd by mid-March.
Kuwait Petroleum had declared force majeure, which stayed in place until June 18, when an interim peace agreement between the warring parties created enough breathing room for exports to resume through the Gulf.
Once the force majeure lifted, production ramped aggressively, with daily output peaks hitting 1.9 million bpd during the final ten days of June.
Oil prices and the supply picture
With supply disruptions of that magnitude, crude pushed above $100 per barrel at various points during the conflict.
Kuwait announced a $16 billion pipeline lease-leaseback deal with Blackstone, KKR, and Brookfield in July, signaling that major institutional investors are betting on Kuwait’s long-term production capacity even as short-term risks remain elevated.
Why crypto investors should pay attention
The Iran conflict has already demonstrated a direct link between Gulf geopolitics and crypto market volatility. When hostilities escalated in late February and March, Bitcoin experienced significant liquidation events as risk-off sentiment swept across asset classes. The US has also targeted Iranian digital assets as part of its broader economic pressure campaign, creating enforcement risks that ripple through exchanges and DeFi protocols.
