Kuwait Investment Company (KIC): Kuwait Leads OPEC's Production Recovery in July
A report on global oil market performance issued by KAMCO Invest confirmed that crude oil prices remained resilient above $85 per barrel, driven by the continued closure of the Strait of Hormuz, rising geopolitical risk premiums stemming from the conflict between the United States and Iran, and the prospect of stricter U.S. sanctions on Tehran and its trading partners.
The report clarified that market conditions remained tight rather than experiencing the usual seasonal decline in late summer; geopolitical concerns and shipping bottlenecks in the Strait of Hormuz and the Red Sea overshadowed negative factors related to inventory levels and downward demand forecasts by international organizations.
The report revealed that Kuwait’s crude oil production witnessed a noticeable recovery in July 2026. Kuwait increased its output by 393,000 barrels per day (according to secondary OPEC sources) to reach 1.85 million barrels per day, forming, alongside Saudi Arabia and Iraq, the primary support for the organization’s supply increases during the month.
In contrast to the rise in production volumes, the average price of Kuwait Export Crude recorded the steepest decline among major crude benchmarks in July 2026, falling by 11.1 percent to an average of $82.0 per barrel, compared to a 2.1 percent drop for Brent Crude ($83.4) and a 7.5 percent drop for the OPEC Reference Basket ($83.0).
Navigation bottlenecks and shipping costs
KAMCO Invest’s report noted that the closure of vital sea lanes disrupted actual shipping movements. Although actual crude prices in the region remained at reasonable levels, shipping costs rising to approximately $20 million imposed an additional price premium borne by buyers.
Furthermore, the inability to export refined products from the region exerted downward pressure on crude oil prices, while markets for refined products such as diesel and distillates recorded significant increases and tightness. U.S. inventories showed a 13 percent decline compared to the five-year average.
