Saudi, Kuwait Report Breakthrough Oil Find Near Wafra Field

Saudi Arabia and Kuwait have announced a significant new oil discovery in the shared neutral zone between the two nations, marking the first major find since the resumption of production operations in 2020.

According to a report from the Saudi state news agency SPA on Monday, the Wafra joint operations have uncovered a new oil reserve in the North Wafra Wara-Burgan field. The new well, situated approximately five kilometers north of the main Wafra field, has shown promising crude oil flows exceeding 500 barrels per day.

“This marks the first discovery since the restart of production activities in the partitioned zone and its surrounding offshore regions in mid-2020,” SPA stated. The find is seen as a critical development in enhancing the energy profiles of both Saudi Arabia and Kuwait, boosting their reputations as dependable global energy providers.

The discovery is expected to further strengthen the exploration and production capacities of the two countries, which had reached a 2019 agreement on sharing oil output in the neutral zone. Industry analysts note that this deal had the potential to introduce an additional 500,000 barrels per day into global markets. The neutral zone is home to two major oilfields—Wafra onshore and Khafji offshore. Both ceased operations in 2014 and 2015, respectively, but resumed production as of July 1, 2020.

Commenting on the importance of the find, Giovanni Staunovo, an energy strategist at UBS, said, “With oil demand continuing to climb, and new supply needed to offset the natural decline in aging wells, any discovery is welcome news.” He also emphasized the necessity of investment to transform such discoveries into fully operational oil fields and highlighted the role of spare production capacity in helping OPEC nations manage global oil market stability.

The announcement follows a series of similar developments in the region. Just last month, Saudi energy giant Aramco reported the discovery of 14 new oil and gas fields and reservoirs. According to Energy Minister Prince Abdulaziz bin Salman, the discoveries included six oil fields, two oil reservoirs, two gas fields, and four gas reservoirs, primarily located in the kingdom’s eastern region and the Empty Quarter. The minister stated these findings would bolster Saudi Arabia’s capacity to meet both domestic and international energy demands for years to come.

Kuwait has also reported substantial progress in its energy sector. In July of the previous year, the Kuwait Oil Company disclosed a major discovery of “huge commercial quantities” of oil and gas in the Al-Nokhatha field, located east of Failaka Island. Preliminary assessments estimated that the field could contain about 2.1 billion barrels of light oil and 5.1 trillion standard cubic feet of natural gas—equivalent to roughly 3.2 billion barrels of oil.

These discoveries are being made at a time when global oil prices are facing increased volatility due to uncertainty surrounding demand and potential overproduction. The OPEC+ alliance, led by Saudi Arabia and Russia, has been gradually lifting supply restrictions. The group announced additional output of 411,000 barrels per day for both May and June, and is expected to announce a similar increment for July during its upcoming meeting on June 1, according to media outlets.

Meanwhile, benchmark oil prices have shown mixed movement. As of 2:42 p.m. UAE time, Brent crude was down by 0.22% at $64.64 per barrel, while West Texas Intermediate (WTI), the U.S. benchmark, dropped 0.29% to $61.35 per barrel.

According to a recent report from Saudi-based Jadwa Investment, oil prices averaged $75 per barrel in the first quarter of the year, a decrease from the $80 average seen in 2024. The drop is attributed to expectations that supply growth will outpace demand growth. The firm noted that while prices saw a steep decline in April and partially rebounded in May, they remain vulnerable to further fluctuations due to shifting U.S. tariff policies and OPEC+ production strategies.

Jadwa forecasted that Brent crude prices will likely hover between $63 and $65 per barrel for the remainder of the year. The report also projected that Saudi Arabia’s crude oil output will rise to an average of 9.4 million barrels per day in 2025, up from 9 million barrels in 2024—an increase of just over 4%. While the higher production volume will help cushion the impact of falling prices, it may not entirely offset it, the report concluded.