According to informed sources, Kuwait has initiated production cuts at some of its oil fields due to exhausted crude storage capacity. This development signals a widespread oil storage crisis in the Middle East, introducing new risks to the global petroleum market. As a founding member of OPEC, Kuwait is discussing further restrictions on both production and refining operations, planning to maintain only levels sufficient for domestic consumption. A comprehensive resolution regarding these output reductions is anticipated to be announced within days. Data provider Kpler indicated that signs already suggest Kuwait has begun reducing output and must intensify these cuts in the coming days. Otherwise, the nation's crude storage facilities are projected to reach full capacity in approximately 12 days. Shutting down oil wells can cause permanent damage to reservoir pressure and is costly to reverse, making it typically a last resort in oil production. Depending on reservoir conditions, restoring full production can take anywhere from several days to weeks. Giovanni Staunovo, a commodities strategist at UBS, commented, "Even if exports resume, production cannot be fully restored on the same day." Approximately one-fifth of the world's daily oil supply transits through the Strait of Hormuz. Shipping through this critical chokepoint has been paralyzed due to conflicts involving Iran, forcing major oil-producing nations in the region into a race against time. Kpler data shows that large storage facilities in Saudi Arabia and the United Arab Emirates are also filling rapidly, with their inventories expected to hit maximum capacity in less than three weeks. Once storage is completely full—a condition known in the industry as "tank tops"—producers will face the reality of shutting down production, a move associated with high technical and political costs. Staunovo added, "Storage capacity in the Middle East is limited. The only way to avoid overflowing inventories is to cut production. The longer the Strait of Hormuz remains blocked, the larger the gap in global crude and refined product supplies will become, driving oil prices higher." Since the outbreak of conflict, international oil prices have surged significantly. The global benchmark Brent crude has risen from around $72 per barrel last week to approximately $89 per barrel currently. If more oil fields are forced to shut down, the suspension of substantial crude supplies could trigger another major price increase. Some analysts predict Brent could surpass the $100 per barrel mark. Gulf nations—including Saudi Arabia, the UAE, Kuwait, and Qatar—rely heavily on extensive tank farms located near their export terminals. These facilities serve as a crucial buffer. Crude oil and refined products are transported from the fields to storage tanks, then blended to contractual specifications via complex pipeline networks and pumping systems before being loaded onto tankers for global customers. When export routes like the Strait of Hormuz are blocked, producers can temporarily divert crude into storage to maintain production. Earlier this week, Iraqi oil officials stated that the country has been forced to cut its oil production by more than half. An official reported that output from Iraq's largest field, Rumaila, was reduced by 700,000 barrels per day. Production at the West Qurna 2 field declined by approximately 450,000 barrels per day, and the Missan field saw a cut of around 350,000 barrels per day. As a precautionary measure, Iraq also halted crude production in the northern Kirkuk region. In a report this week, Antoine Halff, co-founder of data firm Kayrros, noted that while Saudi Arabia possesses greater storage capacity and can bypass the Strait of Hormuz using pipelines, this alternative route has limited capacity given the kingdom's higher production and export volumes. Ras Tanura, the world's largest offshore oil loading port in Saudi Arabia, has been targeted multiple times by drone attacks as part of Iran's campaign against its neighbors. Consequently, Saudi Arabia is redirecting more crude exports to the Yanbu port on the Red Sea. Analysts believe that Saudi Arabia's Red Sea transport system can only partially offset the impact of disruptions to Persian Gulf shipping routes.