According to traders, analysts and sources, Kuwait and the United Arab Emirates will reduce their output next if they can't export crude through the Strait of Hormuz because of the "Iran Crisis" as storage tanks fill.

After six Iranian attacks on vessels, shipping through the Strait of Hormuz has almost ceased. This is a narrow chokepoint that separates Iran from Oman and through which a quarter of the world's oil and gas are transported.

Iraqi oil officials said earlier this week that the country has reduced oil production by almost 1.5 million barrels per day. These cuts could increase to over 3 million bpd in a matter of days, as the country is running out of storage and can't export crude because of the crisis.

Kuwaiti National Oil Company?KPC didn't immediately respond to inquiries about whether shutdowns are imminent. ADNOC, the UAE's oil producer, had no comments beyond Wednesday's statements by its listed subsidiaries that their operations are continuing as normal.

Chokepoint

JPMorgan analysts said in a recent report that Kuwait had about 18 days left before production would have to be 'cut back due to storage usage, and the UAE has 22 days, if vessels do not get rerouted. This is based on estimates from the earliest days of the conflict.

Two traders of 'UAE crude oil said that Abu Dhabi might need to reduce production sooner than this, if exports via the Strait don't resume.

A source from a state-owned oil company in the area said that "at some point soon, everyone else will shut down if vessels don't come."

According to ship tracking data provided by Vortexa and Kpler, around 300 oil tankers remain?inside of the Strait. Following the outbreak of war vessel traffic in and out of this chokepoint has nearly ceased. This excludes the smaller tankers.

(source: Reuters)