Kuwait invokes ‘force majeure’ on its fuel, allowing it to forfeit delivery to NZ’s refined fuel suppliers
Tuesday, 21 April 2026
Reuters is reporting Kuwait has notified customers it is invoking contractual clauses allowing it to withhold certain scheduled deliveries of crude oil and refined petroleum products given disruptions in the Strait of Hormuz.
The clauses, known as “force majeure”, say when there is an extraordinary, unexpected event, fulfilling the contract is impossible.
The crude and refined oil shipped from Kuwait in normal times primarily flows to Asian markets, including the likes of China, South Korea and Singapore.
Kuwait was the top supplier to Singapore before the Iran war, providing the majority of the island nation’s 5.62 million barrels of fuel oil each month. South Korea is Kuwait’s second-largest destination.
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In turn, New Zealand receives a third of its refined fuel imports from Singapore, and about half its fuel imports from South Korea.
MBIE, contacted for comment, referred The Post to MFAT, with whom a request for comment is lodged.
Macquarie University energy markets expert Lurion De Mello said the move wasn’t a “lights‑out” risk, but a warning sign, and part of a wider pattern of producer and shipper caution in a tense geopolitical environment.
He said it “underlined how exposed countries at the end of global supply chains are.
“When stress appears upstream, isolated markets usually feel it with a lag…. first via prices, then via availability.”
However, more oil has been removed from the supply chain than the 70s oil shocks, “so it becomes a big deal when a small player like Kuwait makes such announcements”.
“Kuwait has light and heavy oil. It’s the heavy oil the world is after to make diesel and jet fuel. Supply of this is very tight!”
Indeed, Kuwait Petroleum Corporation’s “force majeure” measure was not expected to result in a complete halt to supply, but rather, formalises the end of normal delivery schedules while the Strait of Hormuz is closed.
Some 870 ships including oil tankers holding about 13 million barrels of oil remain trapped inside the Persian Gulf. Some were poised to go through on Friday last week, when US President Donald Trump said an agreement by Iran to open the strait to traffic had been reached.
But Iran closed access again on Saturday, and on April 19, the last day that was tracked, just three vessels transited the Strait— one inbound and two outbound crossings.
Even if an agreement was signed tomorrow, experts say restoring pre-war energy flows will be slow as storage, vessel sequencing, field restart timing, and damaged infrastructure all stand in front of actual cargo movement.
All three of Kuwait’s major oil refineries have sustained varying degrees of damage. In March, considerably before the “force majeure”, the Middle Eastern state it had begun output and refining cuts in anticipation of further supply disruptions.
Back in New Zealand, petrol prices were charted rising 3.5% in the March 2026 quarter, as per Stats NZ data today. The petrol and diesel price spikes contributed significantly to a higher-than-expected CPI reading this morning, and that was within a quarter that only partly covered the Iran war impacts.
But MBIE said at the last fuel stocks update that the country’s physical supply of fuel remains stable for now.
The government is currently operating under Phase 1 of its national fuel plan, which is a monitoring and information-sharing phase.
Australia moved to Phase 2 in March, reducing excise tax, reducing road user charges for heavy vehicles, and reducing diesel supplier standards among other measures to keep the country’s fuel flowing.
Correction: The spelling of Macquarie University has been corrected.