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(Bloomberg) — Kuwait is asking customers to pick up refined petroleum from its ports deep inside the Persian Gulf, as the region’s oil giants try to ratchet up production and traffic through the Strait of Hormuz increases.
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National oil company Kuwait Petroleum Corp. issued a tender to sell naphtha — used to make gasoline and plastics — requiring buyers pick up cargoes from the country’s ports, according to a document seen by Bloomberg. To reach customers, these would need to transit the waterway.
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Kuwait’s move is the first such offer in a long while, according to traders, without being specific. It differs from previous sales in that it requires buyers to charter their own vessels, they said. Meanwhile, the company did not immediately respond to a request for comment outside office hours.
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Kuwait’s move adds to a flurry of signs from across the region that producers are taking steps to revive vital energy flows following the interim peace deal between Iran and the US. At follow-on talks this weekend, mediators said the sides also established a communication line to avoid incidents and miscalculation, with the aim of ensuring safe passage for commercial vessels through Hormuz.
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Last week, Kuwait Petroleum Chief Executive Officer Sheikh Nawaf Al-Sabah said the company had started boosting oil output. All so-called force majeure notices — a legal clause allowing producers to not honor contractual commitments — that were issued during the war would be lifted, he said.
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To be sure, the situation around Hormuz remains fluid, and Kuwait Petroleum’s offer need not mean buyers and shipowners are willing to risk sending a vessel, the traders said. The security of ships transiting Hormuz remains an “hour to hour” play, according to Chubb Ltd., a major insurer.
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During the war, Kuwait Petroleum previously shipped liquefied petroleum gas through the chokepoint using its own ships, and also offered crude oil from ships from outside the waterway.
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