Kuwait Petroleum says oil output recovery may take 10-12 weeks after Hormuz reopens

Kuwait Petroleum Corporation just threw cold water on the market’s optimism. The state oil company expects it will take 10 to 12 weeks to fully restore production even after the Strait of Hormuz reopens, a timeline that’s significantly longer than many traders had been pricing in.

Speaking at the S&P Global Energy Middle East Petroleum and Gas Conference on June 3, KPC’s managing director for international marketing, Shaikh Khaled Ahmad Al-Sabah, laid out a two-phase recovery. The first phase, covering roughly 70% of normal production, would take six to eight weeks. The remaining 30% would need about another month on top of that.

A recovery slower than Wall Street wants

Kuwait exported zero barrels of crude oil in April 2026. That’s the first time that’s happened since 1991, when Iraqi forces set Kuwaiti oil wells on fire during the Gulf War. The company declared force majeure on shipments starting in March 2026 due to the Hormuz blockade, essentially a legal notice telling buyers: we physically cannot deliver what we promised.

Roughly 20% of global oil flows have been affected by the ongoing regional tensions stemming from the US-Iran conflict.

Refinery output is the one bright spot in the timeline. KPC expects its refining operations, which have capacity of approximately 1.4 million barrels per day, to normalize within two to three weeks of the strait reopening.

Previous estimates from March 2026 were even more sobering, suggesting three to four months for full capacity restoration if conflicts ceased immediately. The current 10-to-12-week estimate is actually the optimistic revision.

Why oil markets won’t calm down anytime soon

Brent crude previously spiked above $111 per barrel during this crisis. The expectation among analysts is that reopening the strait won’t immediately relieve the supply tightness that’s been building since March.

Sustained high oil prices feed directly into inflation expectations. And inflation expectations influence central bank policy. The Federal Reserve and other major central banks have been watching energy costs closely, and a prolonged period of elevated crude prices could delay any plans for rate cuts or force a more hawkish stance.

What this means for crypto investors

Oil prices are one of the most important inputs into global inflation calculations. When crude stays elevated for months, not days, it seeps into transportation costs, manufacturing costs, food prices, and eventually consumer price indexes. Central banks respond to those indexes. A prolonged supply disruption that keeps Brent above $100 makes it harder for the Fed to justify easing monetary policy.

Traders should also watch for second-order effects on crypto mining economics. Higher energy costs directly impact proof-of-work mining profitability. If oil-driven electricity prices remain elevated in key mining regions, marginal miners could be forced offline, potentially affecting network hash rates.

KPC is telling the market to expect constrained supply well into the third quarter of 2026.

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