March 8, 2024 [Oil Price]- Fuel oil exports from one of OPEC’s top crude exporters, Kuwait, are estimated to have hit a record-high level in February, as the new Al-Zour Refinery has ramped up fuel processing to full capacity.
In February, fuel oil exports from Kuwait reached a record high of around 720,000 metric tons, equal to 158,000 barrels per day (bpd), according to ship-tracking data from analytics firm Kpler cited by Reuters.
According to data from LSEG, Kuwait’s fuel oil exports in February have been around 516,000 tons, which is the highest export volume since March 2016.
Since the Al-Zour refinery was commissioned at the end of 2022, Kuwait has become a major exporter of very low-sulfur fuel oil (VLSFO) and high-sulfur fuel oil (HSFO), primarily used as fuels in shipping.
Of the total fuel oil exports estimated by Kpler this month, 60% was VLSFO and the other 40% HSFO, per Reuters calculations based on Kpler data.
The key to the rise in Kuwait’s fuel oil exports has been the new Al-Zour Refinery, one of the largest crude processing facilities in the Middle East operated by Kuwait Integrated Petroleum Industries Company (KIPIC).
The refinery, which KIPIC says is the world’s largest grass-root refinery with 615,000 bpd capacity, began ramping up operations in 2023 and was expected to reach full capacity in October.
In November, the refinery experienced a brief halt following a “sudden interruption” in fuel and gas supply and was expected to return to operations 10 days later.
The refinery has high flexibility as it is designed to process various types of Kuwait crude including the Kuwait Heavy Crude (KHC) oil, which will be produced according to the upstream strategy of the Kuwait Petroleum Corporation (KPC), the state oil firm of one of the largest crude oil producers in the Middle East.
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