Kuwait, Saudi Arabia to stop production from Al-Khafji oil field

Kuwait and Saudi Arabia agreed to stop production from the Al-Khafji crude oil field – part of their shared Neutral Zone – as of June 1, according to a source with knowledge of the situation, Report informs, citing S&P Global Platts.

The shutdown comes just months after both countries agreed to resume production at the Neutral Zone. Total production at the Neutral Zone, which comprises the offshore Al-Khafji and onshore Wafra fields, was 260,000 b/d in April, with each country sharing output 50-50. Kuwait's share of the Wafra field was 60,000 b/d at the time, and the Al-Khafji share was about 70,000 b/d, signaling the shut down will remove about 140,000 b/d from the market.

"There are simply no buyers. This is why everybody is volunteering cuts," the source said.

In December, Saudi Arabia and Kuwait agreed to restart the Neutral Zone, with Al-Khafji, which has shuttered since 2014. It is jointly owned by Saudi Arabia's Aramco Gulf Operations Co. and Kuwait Gulf Oil Co., a unit of state-run Kuwait Petroleum Corp.