Industry

Kuwait is going ahead with its offshore development programme. (Image source: Adobe Stock)

At CERAWeek, taking place in Houston from 23-27 March, Shaikh Nawaf S. Al-Sabah, deputy chairman and CEO of Kuwait Petroleum Corporation (KPC) reaffirmed progress on key strategic projects, including Project Seif and Project Peregrine, despite the current situation

Project Seif involves the development of Kuwait’s recently-discovered offshore fields, in which Kuwait is inviting IOCs to participate, and will ensure “additional production resilience and capacity to help meet production targets in the future,” Shaikh Al-Sabah said in his virtual address. Kuwait aims to lift production capacity to 4mn bpd by 2035 from around 2.5mn bpd currently.

“This is something that is of paramount importance in Kuwait, it is a project with real international scope and we’re moving ahead with this,” he confirmed.

“At the same time, on a shorter timescale, we have Project Peregrine, which is the project by which we lease and lease back our pipelines,” he continued. “This will be the largest single foreign investment in Kuwait.”

He added that the principal partners and investors had confirmed that they are still keen for the project to go ahead, and to continue to participate.

“This is a recognition that Kuwait remains open for business through these attacks,” he said, in reference to Iran’s drone attacks on the country's critical infrastructure facilities.

Shaikh Al-Sabah highlighted the global implications of any disruptions in the Strait of Hormuz, noting its “vital concern” to the world economy, with around 75% of Asia’s oil and 83% of its LNG passing through it. 

“It’s a domino effect,” he said. ”The costs of this war don’t stay in geographical lines in this region, they extend all the way through the supply chain.” He noted the impact on petrochemical supply chains and even food security, given the use of polyethylene in food packaging. He added that most of the world’s urea fertiliser comes from the Gulf.

Echoing other Gulf energy leaders, he said, “We are outraged by this attack on us. These attacks are no just on the Gulf, but are holding the world’s economy hostage. This is an attack on our sovereignty in Kuwait, on our people, and on our facilities. This act is unjustified and illegal by all standards."

Oil market conditions have become unstable. (Image source: Adobe Stock)

Oil markets are trading headlines, but the real disruption is still building, says Neil Crosby, AVP Oil Analytics at Sparta

Oil markets are becoming increasingly difficult to trade, as geopolitical headlines rather than fundamentals drive price action.

Recent price moves underline just how unstable conditions have become. Crude has swung sharply within minutes, reflecting both elevated positioning and the sheer unpredictability of political developments.

In this environment, even flat price is becoming unreliable as a signal of underlying market conditions.

At the same time, what is being presented as de-escalation may not represent a genuine shift. The lack of clear diplomatic channels and conflicting messaging suggests that recent developments are more about managing the situation than resolving it.

More importantly, there is a growing disconnect between crude and refined product markets. While crude prices have remained relatively contained, product markets, particularly diesel and jet, continue to reflect significant tightness. This divergence highlights a deeper issue: the physical supply crunch has not been resolved.

The key variable remains the Strait of Hormuz. Until there is clear and sustained evidence that flows through the strait have normalised, the market cannot be considered stable. And even in a best-case scenario, the process of restoring supply chains will take time.

Repositioning vessels, restarting refineries and rebuilding inventories are not immediate fixes. Even if flows resume, the system will take weeks, if not months, to return to anything resembling normal conditions.

That has important implications for pricing. While short-term moves may be driven by headlines or policy signals, the underlying balance remains tight. In that context, oil may still be underpriced relative to the scale and duration of disruption.

For traders, the focus is shifting away from flat price and towards physical indicators such as spreads, which better reflect real market stress.

This is no longer just a price story. It is a structural disruption, and one that is likely to persist.

HE Dr. Sultan Al Jaber. (Image source: ADNOC)

His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, ADNOC managing director and Group CEO, chairman of Masdar and executive chairman of XRG, has said that weaponising the Strait of Hormuz is an act of economic terrorism with global impact far beyond energy markets

Speaking at CERAWeek, taking place in Houston, Texas, Dr. Al Jaber said, “Twenty-one miles wide. Twenty million barrels a day. Nearly a fifth of the world’s oil and gas. Over a third of the world’s fertilizer. Almost a quarter of the world’s petrochemicals and significant amounts of industrial metals. In short, much of the oxygen of the global economy runs through a single throat. Yet, Iran believes that choking it is an acceptable strategy.

“When Hormuz is squeezed, the pressure is immediately felt around the world. In just three weeks, the price of oil has risen by 50%. This is raising the cost of living for those who can least afford it and slowing economic growth everywhere. From factories, to farms, to families around the world, the human cost is mounting by the day.

“Weaponising the Strait of Hormuz is not an act of aggression against one nation. It is economic terrorism against every nation. And no country should be allowed to hold Hormuz hostage, not now, not ever. And while we appreciate all efforts to stabilise markets and reduce prices, this is not a supply issue. It is a security issue, and it has only one durable answer, keeping the Strait open. We cannot trade our way out of this crisis.”

Dr. Al Jaber stressed the UAE did not ask for conflict and had taken every possible step to prevent it, but its defences, resilience and character had withstood attack when it came.

“At ADNOC, we took hits no civilian enterprise, let alone one focused on delivering energy to the world, should ever have to take. We are deploying extraordinary measures to keep our people safe and to make sure, as much as possible, every customer and every stakeholder gets what they need.”

Dr. Al Jaber said the UAE and ADNOC’s resilience was not a reaction, but the result of years of investment in infrastructure, preparation and long term planning and strategic partnerships.

“We built ADNOC into one of the most reliable energy companies on Earth not because disruption never reaches our borders, but because when it does, we stay the course. That’s why we have diversified how we produce energy. We have expanded the routes that connect supply to markets.

“We have integrated all sources of energy at scale. We have embedded technology and AI across our operations as the force multiplier that will define the next era of energy. And we have built a global network of partners who believe that energy security is a shared responsibility.”

He ended with an invitation to energy leaders to attend ADIPEC in November, where the resilience of the global energy system will be a focus of discussion.

Meanwhile, ADNOC Gas has confirmed in a disclosure to the Abu Dhabi Securities Exchange that operations are continuing safely across its asset base. Following debris falling near certain facilities, inspections confirmed no injuries and no impact to core processing integrity, the company said. Operations were suspended at the Shah gas plant, which provides around 20% of the UAE’s gas supply, following a drone attack, and were also suspended at Habshan gas facility, one of the region’s largest, on 18 March after the interception of missiles targeting the facility and the Bab oilfield, which caused falling debris.

“The company’s continued focus is on ensuring the safety of staff, contractors, partners, and operations while continuing to serve its customers,” the company states.

In response to ongoing shipping disruption in the Strait of Hormuz, ADNOC Gas has separately made temporary operational adjustments to production of LNG and Export Traded Liquids and is actively collaborating with customers and partners on a transaction-by-transaction basis to fulfill commitments wherever possible.

Mark Heine, Fugro CEO, (left) and Auden Berg, EVP, Kongsberg Discovery, sign the agreement at Oceanology International. (Image source: Kongsberg Discovery)

Kongsberg Discovery and geo-data specialist Fugro have strengthened their technology partnership through a new supplier agreement

The contract, confirmed at Oceanology International in London, positions Kongsberg Discovery as a preferred technology partner for Fugro, supplying advanced hydroacoustic and positioning technologies across Fugro’s global fleet, including the company’s expanding portfolio of uncrewed surface vessels (USVs). Together, the assets and technology will deliver high-quality, precise hydrospatial data and efficient, safe and sustainable remote operations.

Auden Berg, EVP, Kongsberg Discovery, said, “Fugro has been a valued partner for many decades and together we have helped shape the evolution of modern hydrospatial surveying. This new framework agreement takes that collaboration to the next level. By combining Fugro’s operational expertise with Kongsberg Discovery’s advanced sensor and positioning technologies, we can continue delivering the reliable, high-quality data that Fugro’s customers depend on for informed decision making and understanding of complex marine environments.”

Fugro has built an advanced network of Remote Operations Centres (ROCs) to enable USV tasks, helping reduce emissions by up 95%, with enhanced safety and 24/7 operational efficiency. Kongsberg Discovery technologies are central to these developments, supporting the precise navigation, seabed mapping and underwater positioning required for autonomous success.

As well as multibeam echosounders and Seapath motion and GNSS positioning systems, Fugro will continue to utilise a broader portfolio of Kongsberg Discovery systems including HiPAP underwater acoustic positioning and communication technology. Together, these solutions provide the high-accuracy situational awareness needed for complex offshore survey projects.

Mark Heine, Fugro CEO, commented, “Our focus is on delivering high quality Geo data and clear insights that help customers reduce risk and make well informed decisions throughout the life of their projects. Kongsberg Discovery’s systems play a key role in supporting our global survey operations, enabling us to operate efficiently while maintaining consistent and reliable outcomes in increasingly complex marine environments.”