Kuwait exported record volumes of very low sulfur fuel oil (VLSFO) in January after a key refinery restarted full operations following a fire-induced partial outage at the end of last year.
One of the Gulf’s top crude oil exporters, which also vies to be a major fuel oil exporter, was able to significantly increase fuel oil exports after the commissioning of the Al-Zour refinery at the end of 2022.
Al-Zour Refinery, one of the largest crude processing facilities in the Middle East, is operated by Kuwait Integrated Petroleum Industries Company (KIPIC).
The processing plant, which KIPIC says is the world’s largest grass-root refinery with 615,000 barrels per day (bpd) capacity, reached full capacity in October 2023.
Since then, 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.
But several unplanned outages due to fires and stoppages have weighed on the Kuwaiti exports quite a few times since 2023.
The most recent outage at some crude distillation units at the end of 2025 extended from October through November, and Kuwait’s fuel oil exports were virtually non-existent for about two months, while the Gulf producer and key OPEC member offered more crude for exports during the period.
However, with the Al-Zour refinery now running all units, Kuwait’s VLSFO exports jumped to over 1 million metric tons, or about 205,000 barrels per day, in January, according to vessel-tracking data from Kpler and LSEG cited by Reuters.
This was the highest monthly volume on record, per estimates by Reuters.
Last month’s surge in the Kuwaiti fuel oil exports, predominantly to Southeast Asia and bunkering hubs in the Middle East, have started to weigh on the fuel oil margins and prices on the Asian markets.
“The VLSFO market is likely going to see pressure this quarter from the rise in Kuwait’s exports,” Royston Huan, senior oil products analyst at Energy Aspects, told Reuters.
By Tsvetana Paraskova for Oilprice.com
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