Kuwait’s Al-Zour Refinery faces significant production cutback

Output falls by 175,000 barrels

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KUWAIT CITY, Feb 20: Oil industry sources disclosed the underlying causes behind the current decrease in production at Al-Zour Refinery, which has seen a reduction from its maximum capacity of 615 thousand barrels per day to 440 thousand barrels. Sources told Al-Seyassah that these factors converge to shape the current scenario.

Firstly, the seasonal decline in demand due to the conclusion of the Winter season in many countries worldwide is a recurring phenomenon, prompting a reduction in oil consumption during this period each year.

Secondly, ongoing tensions in the Red Sea have escalated shipping costs for refined oil, necessitating a reduction in production at Al-Zour Refinery to mitigate the impact of high shipping expenses.

Thirdly, the proliferation of new refineries, such as the Kuwaiti-Omani Duqm refinery, which refines 230 thousand barrels per day with Kuwait’s 65 percent stake, has contributed to a surplus of refined products. Additionally, refineries in India, China, Mexico, Venezuela, and Nigeria are supplying substantial quantities of refined oil.

The recent commencement of production at the Nigerian Dangote refinery, owned by Africa’s wealthiest businessman, with a capacity of 650 thousand barrels per day, is expected to reshape refined oil supplies, particularly for African countries, reducing dependence on Gulf countries.

Lastly, Al-Zour Refinery’s production reduction follows the completion of its trial period to operate at full capacity, having initially produced 410 thousand barrels per day before reaching its maximum output. Despite these challenges, Al-Zour Refinery remains a key player in the production of various derivatives including kerosene, petrochemical naphtha, jet fuel, low-sulfur fuel oil, and very low-sulfur diesel. It is poised to continue supplying the Asian and European markets, maintaining its status as a significant global refinery.

By Najeh Bilal
Al-Seyassah/Arab Times Staff

This news has been read 2268 times!

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