Ten to twelve weeks. That is how long Kuwait says it will take to fully restore oil production after the Strait of Hormuz reopens—assuming it reopens soon. Kuwait Petroleum Company's managing director told the S&P Global Energy conference that the country would need six to eight weeks to recover roughly 70% of normal production levels, with the remaining 30% requiring about another month , according to OilPrice.com. Markets have spent months pricing in the reopening of Hormuz. Almost no one has priced in what comes after.
Restarting production involves stabilizing wells, gathering systems, storage facilities, export terminals and logistics networks after prolonged outages , OilPrice.com reported. The timeline matters because U.S. commercial crude inventories have erased their entire 2026 build in just five weeks, with massive Strategic Petroleum Reserve releases masking what would otherwise be a far steeper supply drawdown . The EIA reported Wednesday that commercial crude stockpiles fell 8.0 million barrels during the week ending May 29 , marking the sixth consecutive weekly decline. Oil settled at $71.50/bbl per barrel, up +0.63%, according to market data.
Can Pipelines Replace a Strait?
Gulf producers are no longer waiting for diplomacy. Gulf nations are accelerating plans to bypass the Strait of Hormuz, moving long-discussed pipeline projects from theoretical concepts toward operational reality , the Pipeline Technology Journal reported. The Financial Times noted Tuesday that Gulf states are in active talks to build new export routes around the chokepoint that has been effectively closed since late February.
Saudi Arabia and the UAE are already leveraging existing infrastructure to mitigate risks, with Saudi Arabia's 1,200-kilometer East-West pipeline transporting up to 7 million barrels per day from eastern fields to the Red Sea port of Yanbu . But replicating the East-West pipeline today would cost at least $5 billion, while multi-country corridors could exceed $20 billion , according to the Pipeline Technology Journal. Kuwait is in talks with "friendly countries" on potential pipeline projects, with one executive noting the crisis had highlighted Kuwait's need for larger storage capacity , Reuters reported.
The math is unforgiving. The East-West pipeline and the UAE pipeline to Fujairah have a combined estimated 3.5 to 5.5 million barrels per day of available capacity , CNBC reported in April—far short of the roughly 20 million barrels that transited Hormuz daily before the crisis.
Why Is the US Approving Floating LNG Now?
Amid the chaos, Delfin LNG has sanctioned the first floating LNG export project in US waters, advancing a 4.4 million tonnes per year vessel that could add a new offshore component to Gulf Coast export growth by the end of the decade , Natural Gas Intel reported Tuesday. Financing for the estimated $4.3 billion first phase could be finalized in the coming days , Bloomberg reported last week.
The timing is no accident. LNG supply is down about a fifth after Qatar halted production, while the Strait of Hormuz remains largely closed , The Japan Times reported. And now Australia is adding to the pressure: industrial action at the Ichthys LNG project offshore Australia has started to affect loadings, with one tanker delayed as a result of the limited strike that began earlier this week , OilPrice.com reported. Ichthys accounts for about 2% of global output, with capacity to export around 9.3 million tons a year, mainly to Japan .
The Offshore Alliance said it began strike action at all three Inpex facilities on June 2, with negotiations over an enterprise agreement having "fallen short on a number of fundamental claims" , S&P Global reported. Workers are downing tools for four hours daily through June 10, with another strike notice served for June 11-23.
Natural gas futures slipped -2.40% to $3.25/MMBtu per million British thermal units on Wednesday, according to market data, but the anticipated bullish impact on Henry Hub prices could face an unexpected headwind from the tech boom itself , Natural Gas Intel noted, as AI-driven supply-side efficiencies may cap price gains even as data center demand surges.
