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Halt of Oil Production in Saudi-Kuwaiti Joint Region in June

Halt of Oil Production in Saudi-Kuwaiti Joint Region in June
    Dubai, Kuwait- Asharq Al-Awsat
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Halt of Oil Production in Saudi-Kuwaiti Joint Region in June

Halt of Oil Production in Saudi-Kuwaiti Joint Region in June

Kuwait and Saudi Arabia have agreed to halt oil production from the joint al-Khafji field for one month, starting from June 1, German official news agency (DPA) quoted informed sources as saying.

However, no official statement has been issued by both sides to affirm or deny this news.

The halt was described as a technical, environmental, and tactical, in light of the voluntary reduction initiated by Saudi Arabia, Kuwait, and the UAE.

Both Gulf states have agreed with other members of the OPEC+ group of oil producers to cut output in a bid to reduce a glut in global supplies.

They have also said they would make additional cuts beyond the agreed curbs.

According to DPA, citing sources, Kuwait Gulf Oil Company and Saudi Aramco have reviewed several scenarios, including halting or reducing production.

Yet, the last option was excluded because it could cause harmful emissions to the environment.

Khafji is operated by Al-Khafji Joint Operations Co, a joint venture between Kuwait Gulf Oil Company and Aramco Gulf Operations Company (AGOC), a subsidiary of state oil giant Saudi Aramco.

It had been producing between 280,000 bpd and 300,000 bpd of Arabian Heavy crude before its closure in 2014 for environmental reasons.

The suspension is purely technical, DPA reported, adding that it is considered the best option from all aspects.

It pointed out that the decision was sent to the Supreme Executive Committee in the joint operations area an Al-Khafji for approval, in accordance with the followed procedures.

Sources hailed the harmony between the partners in the joint operations area in taking decisions that aim at achieving strategic goals.

They affirmed that the coming period will witness a more gradual rise in production.

Kuwait and Saudi Arabia, both members of the Organization of the Petroleum Exporting Countries (OPEC), agreed last year to end a five-year dispute over the area known as the Neutral Zone, allowing production to resume at two jointly run fields that can pump up to 0.5 percent of the world’s oil supply.

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Volkswagen CEO Looks to Avoid Plant Closures as Automaker Moves to Cut Costs

FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo
FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo
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Volkswagen CEO Looks to Avoid Plant Closures as Automaker Moves to Cut Costs

FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo
FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo

Volkswagen's CEO indicated in comments published Sunday that he's trying to avoid closing plants as he seeks to turn around the automaker's performance.

The Wolfsburg, Germany-based company faces pressure to cut costs at home and increasingly intense competition in the lucrative Chinese market, in particular.

Last week, Volkswagen said its “fundamental realignment” over the past three years had reached its next phase, announcing plans to streamline the model lineup by up to half.

It didn't provide specifics, and questions remain over how else it will cut costs. There has been renewed speculation about the future of several plants in Germany.

“There are more intelligent solutions than closing plants,” CEO Oliver Blume told the Bild am Sonntag newspaper, according to The Associated Press.

He added that a cost-cutting program in Germany already is producing effects. “We were able to improve our factory costs in Germany by an average 20% last year alone,” he said, describing that as “strong progress.”

Blume argued that Volkswagen's products are very popular, but “we just earn too little money with them. So we must continue to reduce our costs. In all kinds of costs.”

Business

While Global Oil Demand Drops, US Drivers Keep Buying More Gas

A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)
A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)
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While Global Oil Demand Drops, US Drivers Keep Buying More Gas

A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)
A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)

While global oil demand is set to decline this year due to the US-Iran conflict, gasoline consumption in the United States increased in the second quarter of 2026.

Gasoline prices surpassed $4.50 on average for a gallon of regular in the US in May, rising more than 50% since the start of the war, according to AAA data.

But that didn’t stop drivers from hitting the road; in fact, gasoline consumption rose in the US during the second quarter of the year, according to AP.

One reason may be because the percentage of household income spent on gasoline in the US has been declining for years, said Daniel Sternoff, senior fellow at the Center on Global Energy Policy at Columbia University. Plus, many people have been transitioning from remote work to in-office jobs, he added.

“Even though it’s a really political price that people pay a lot of attention to, if you are in the higher quintiles of income in the US, you might grumble about it, but you’re not really driving less just because of that increase in prices,” Sternoff said.

Jim Burkhard, vice president and head of crude oil research at S&P Global Energy, said, “The future of Hormuz is probably more uncertain today than it was at the beginning of the war.”

Burkhard said Iran is still trying to control the strait, while the US has not been able to fully restore normal operations, making a return to prewar conditions unlikely.

Global oil demand averaged just 97.9 million barrels per day in May, down 5.3 million barrels per day from a year earlier. Much of the decline was in Asia, which relies heavily on oil from the Middle East.

According to a report from the International Energy Agency Global, oil demand is set to decline this year for the first time since the height of the COVID-19 pandemic in 2020.

The drop, which the agency expects to amount to about 1 million barrels per day in 2026, is due to higher oil prices and disruptions to physical supply that weighed heavily, but unevenly, on various parts of the world, the report said.

The supply disruptions were caused by the war between the US and Iran, which left ships loaded with crude oil stranded in the Arabian Gulf for more than three months, unable to safely travel through the Strait of Hormuz, a major route for oil and gas shipments.

But the main exception to the global slump in oil usage was in the US, where gasoline use increased in the second quarter of 2026, despite the fact that pump prices were about 50% above their prewar levels in May, the report said.

Business

Eni Warns Oil Market Risks Breaking Out of Current Range if Iran War Continues

Tugboats guide the crude oil tanker Odessa, carrying UAE crude after passing through the Strait of Hormuz with its Automatic Identification System transponder turned off, navigates the waters at Daesan port, where it is expected to discharge crude oil, in Seosan, South Korea, May 8, 2026. (Reuters)
Tugboats guide the crude oil tanker Odessa, carrying UAE crude after passing through the Strait of Hormuz with its Automatic Identification System transponder turned off, navigates the waters at Daesan port, where it is expected to discharge crude oil, in Seosan, South Korea, May 8, 2026. (Reuters)
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Eni Warns Oil Market Risks Breaking Out of Current Range if Iran War Continues

Tugboats guide the crude oil tanker Odessa, carrying UAE crude after passing through the Strait of Hormuz with its Automatic Identification System transponder turned off, navigates the waters at Daesan port, where it is expected to discharge crude oil, in Seosan, South Korea, May 8, 2026. (Reuters)
Tugboats guide the crude oil tanker Odessa, carrying UAE crude after passing through the Strait of Hormuz with its Automatic Identification System transponder turned off, navigates the waters at Daesan port, where it is expected to discharge crude oil, in Seosan, South Korea, May 8, 2026. (Reuters)

The global oil market will break out of its roughly $80-$100 range by the first quarter of 2027 at the latest, boosting inflation and reducing energy demand, if the Middle East conflict continues, Claudio Descalzi, the CEO of Italian state-controlled group Eni said.

The release of stockpiles has helped to keep crude prices largely within that range ⁠so far, he said in an interview with Il Sole 24 Ore newspaper published on Saturday.

Oil prices ended the week with solid gains despite easing from their midweek peaks following renewed US-Iran hostilities and attacks on shipping in the Strait of Hormuz.

Brent crude climbed above $75 a barrel before falling to the $70 averages, close to its pre-war trading.

Descalzi said the strategy carries growing risks because global reserves are finite.

“The long-term solution is greater energy security through diversification of supply sources and routes,” he said.

In March, the International Energy Agency (IEA) said its member countries have agreed to release 400 million barrels of oil in an attempt to bring down oil prices as the Iran crisis and the consequent disruption of shipments through the Strait of Hormuz inflicted massive shocks to energy markets.

The IEA’s maximum drawdown capability aims to decrease the safety margin in oil markets, increasing the likelihood of sharp, structural price fluctuations if any new supply disruptions emerge.

Every $5 increase in oil prices adds roughly $190 billion ⁠in annual costs to the global economy, according to Reuters calculations based on oil demand of 104 million barrels per day.

At current Brent prices, it would likely cost more than $70 billion to replace reserves drawn down ⁠to mitigate Iran war supply loss.

Descalzi said global oil stocks have fallen by an average 3.8 million barrels per day, accelerating ⁠to 4.6 million bpd in May, as a result of disruption linked to the Iran war that began at the end of February.

He said countries should focus on producers in North ⁠and sub-Saharan Africa, Latin America and Southeast Asia, while reducing dependence on controlled maritime passages.

Eni has limited exposure to the ⁠Middle East, while most of its upstream production is in Africa and Latin America.

Power demand generated by artificial ⁠intelligence technologies and the rapid expansion of data centers has increased the urgency of ensuring security of energy supply.