Saudi Arabia’s decision to shut down the 300,000 b/d offshore Khafji oil field has brought to the fore tensions with Kuwait over the shared assets of the Neutral Zone. The two Gulf OPEC states are traditional allies whose policies are normally closely aligned. But when it comes to the Neutral Zone, the relationship is complicated. Saudi Arabia’s unilateral move has angered Kuwait and exposed tensions between the two at a time when the Gulf Cooperation Council (GCC) is already split.

A senior Saudi source tells MEES that the Saudi Environmental Agency had ordered the shutdown of the Khafji field over environmental concerns, adding that the oil ministry had no choice but to comply. Strict new environmental directives apply not only to oil production but to gas, refining, petrochemicals and other related industry, he adds. “The field has been shut down completely,” he says. Khafji production was already falling before the gradual shutdown of the field was completed. (CONTINUED - 1348 WORDS)