Brent hits multi-month lows as Kuwait restores 1.65M bpd of output

Kuwait's crude production climbed to 1.65 million bpd in June, up from 580,000 bpd in May, according to a source familiar with the situation who spoke to Reuters. Daily output peaked at roughly 1.9 million bpd in the final ten days of the month. That still sits below the pre-disruption baseline of around 2.5 million bpd, but the trajectory is clearly upward.

The recovery follows the closure of the Strait of Hormuz earlier this year, when Iran shut the waterway in response to US and Israeli strikes. Gulf producers, including Saudi Arabia and Iraq, cut output by millions of barrels per day during the disruption. Reuters reports that previously stranded cargoes are now being cleared as producers resume normal operations. Kuwait Petroleum Corporation confirmed on 18 June that all force majeure notices issued during the war had been lifted, and a tender document the following day showed cargoes being offered to buyers.

What this means for UK buyers

Oil is not a direct UK procurement cost, but it feeds the wider energy complex that shapes your gas and power curves. Crude was already trading at its lowest levels since late February when the Reuters report landed, and prices extended their decline on the news. The Financial Times noted that the Strait's reopening has removed a major supply premium that had built up through the conflict.

The chart below shows Brent over recent months, against which the latest slide to multi-month lows can be read.

For buyers, the recovering Gulf flows matter across several fronts:

• Brent crude, now at multi-month lows after the Kuwait report
• NBP gas, which tracks global LNG and oil-indexed contracts
• UK baseload power, sensitive to gas-fired generation costs
• LNG cargo availability, easing as Hormuz traffic normalises
• Renewal timing for fixed contracts through Q3

Kuwait is more exposed than most Gulf states because it relies almost entirely on the Strait of Hormuz for crude exports. Unlike Saudi Arabia and the United Arab Emirates, which hold alternative pipeline routes, Kuwait was effectively cut off from Asian markets during the closure. S&P Global reported that the restart depends on sustained Hormuz shipments rather than a single policy decision, so the pace of recovery is worth tracking week by week.

Bloomberg reported that Kuwait's oil chief expects output to return to prewar levels swiftly, which would add further supply into a market already softening. For buyers weighing a fixed renewal, the near-term direction favours patience: if Gulf output continues to normalise and the risk premium keeps unwinding, forward curves may soften further before they firm. Watch the next OPEC+ signals and Hormuz shipping data through July for confirmation that the recovery is holding.