The increasing war in the Middle East is now affecting the global energy market as well. Amidst the ongoing conflict between America, Israel and Iran, many oil producing countries are taking major decisions regarding production and export. Due to these decisions, there is increasing concern about the supply of oil and gas across the world.
Recently, Qatar had taken an important decision regarding the export of LNG. Now Kuwait has also announced to reduce oil production. Kuwait’s government company Kuwait Petroleum Corporation (KPC) said in a statement issued on March 7 that this decision has been taken as part of risk management and business strategy due to increasing security threats in the region. However, the company did not say how much production would be cut.
Decision of Kuwait’s government company
According to the Bloomberg report, Kuwait’s government company said that due to the increasing danger in the Strait of Hormuz, the movement of ships has become risky. For this reason, a decision has been taken to reduce oil production as a precaution. Kuwait says that if the regional situation becomes normal then this decision will be reviewed again and production can be increased. Kuwait is among the world’s largest oil producing countries. In February it produced about 26 lakh barrels of oil per day. In such a situation, any change in its production can have an impact on the global markets. According to reports, production and exports have been affected in many countries of the Gulf region. Production in Iraq’s oil fields has also declined and has reduced to about 1.5 million barrels per day. Due to increased shipping risks, there has been increased pressure on export routes and storage facilities.
Tension for UAE
Meanwhile, speculations are also being made regarding the United Arab Emirates that if the obstruction in sea routes continues then it could also be the next big country to reduce production. In fact, the Strait of Hormuz located between Iran and Oman is one of the most important energy routes in the world. About 20 percent of the world’s oil is transported from here. Any disruption in this path impacts the global energy market. This entire crisis seems to be affecting Pakistan the most. Pakistan is already facing energy crisis.
According to reports, the country has only limited reserves of crude oil and gas left. The situation has become more serious because recently Qatar has sent a notice to Pakistan warning it to stop the LNG supply. Pakistan’s Energy Minister Ali Pervez Malik said that if Qatar’s supply is stopped then the energy crisis in the country may deepen further, because about 99 percent of Pakistan’s LNG requirement is met by Qatar.
Where does oil come from in Pakistan?
Kuwait’s decision to reduce oil production can also become a new challenge for Pakistan. Pakistan meets a large part of its oil needs through imports and Kuwait is one of its major suppliers. According to statistics, Pakistan imports about 40 thousand to 60 thousand barrels of petroleum products and crude oil from Kuwait every day.
