Oil Output From Saudi, Kuwait Shared Zone On Hold As Relations Sour

Saudi Arabia and Kuwait will struggle to resume oil production from jointly operated fields any time soon due to operational differences and souring political ties between the previously close Gulf OPEC allies, sources familiar with the matter said.

The two countries halted output from the jointly run Khafji and Wafra oil fields in the so-called Neutral Zone more than three years ago, cutting some 500,000 barrels per day, or 0.5%, of global oil supply.

As oil prices rose to a four-year high above $85 per barrel this year, Washington has been pressing its top Gulf ally Riyadh to reduce crude prices by increasing production.

Saudi Crown Prince Mohammed bin Salman visited Kuwait last month to discuss a resumption of oil output from the zone.

But the sources, who asked not to be identified as they are prohibited from discussing the issue publicly, said the talks failed to move the two countries closer to a deal as Kuwait resisted Riyadh’s push for greater control of the fields.