Sheikh Nawaf Al Sabah, CEO of Kuwait Oil Corporation, speaks at the S&P Global Conference “CERAWeek” held in Houston, Texas on March 11, 2025.
F. Carter Smith | Bloomberg | Getty Images
HOUSTON – Kuwait said Tuesday that Iran’s blockade of the Strait of Hormuz is tantamount to an economic blockade of Gulf Arab oil-producing states, warning that the impact is beyond catastrophic and will cause a domino effect around the world.
Sheikh Nawaf Al Sabah, CEO of Kuwait Oil Corporation, told the oil industry at S&P Global’s energy conference CERAWeek in Kuwait that it was “outraged by this attack on us.”
“This is not only an attack on the Gulf, but an attack that is holding the global economy hostage,” said al-Sabah, speaking by video conference from Kuwait after canceling an appearance in Houston because of the war.
Unable to export to global markets, Kuwait declared force majeure on delivery contracts and curtailed oil production. Al-Sabah said KPC currently only produces oil for domestic consumption.
Saudi Aramco CEO Amin Nasser warned earlier this month that a war with Iran would have “catastrophic consequences” for the global economy. Al-Sabah said Nasser downplayed the impact of the strait closure.
“It’s a domino effect,” Al-Sabah said. “The cost of this war extends far beyond the geography of this region. It extends throughout the entire supply chain.”
Al-Sabah said it would take many months for oil production in the Gulf to reach full production as Kuwait and its neighbors shut down wells. Before the war, Kuwait produced about 2.6 million barrels per day, making it OPEC’s fifth largest producer.
“We have resilient reservoirs and can draw significant production quickly, within days,” Al-Sabah said. “The majority will be delivered within a few weeks, and then full production will be delivered within three to four months.”
Emergency oil releases by more than 30 countries of the International Energy Agency, including the United States, will do little to address the supply shortage, the CEO said. He said emergency stockpiles of 3 million barrels a day would not be able to offset cuts in Iraq, let alone cuts in Saudi Arabia and the United Arab Emirates.
“There is no substitute for this strait,” Al-Sabah said.
But the impact of the war extends far beyond oil and gas, the CEO said. There will be a shortage of petrochemicals that produce plastic for food packaging, making it difficult to transport food around the world, he said.
Al-Sabah said fertilizers from the Gulf also cannot be distributed to the global market as the planting season begins in many parts of the world. Some countries in the developing world could see a 50% drop in harvest compared to the previous year, he said.
Tanker and cargo traffic through the strait that connects the Persian Gulf to the rest of the world has been sharply reduced by Iranian attacks on merchant vessels. Before the war, about 20% of the world’s oil supply passed through waterways.
Iran has launched a barrage of missile and drone attacks against Gulf Arab states. These airstrikes were carried out after the United States and Israel launched large-scale airstrikes against Iran starting February 28th.
Defense Minister Al-Sabah said multiple air raid sirens were sounded in Kuwait early Tuesday as Iran launched ballistic missile attacks against civilian infrastructure.
Al-Sabah said Iran attacked Kuwait’s refineries even though they are wholly owned by the state. He said Kuwait’s social security administration came under attack earlier this month.
“This all belies Iran’s claims that it is limiting its attacks only to US infrastructure in the region,” Sabah said.
