Kuwait says may resume normal oil output three days after strike ends

KUWAIT (Reuters) - Kuwait’s crude oil production may return to normal within three days, after a strike by local oil and gas workers ended, state news agency KUNA quoted the oil sector’s official spokesman Sheikh Talal al-Khaled al-Sabah as saying on Wednesday.

Traditional Arabic coffee is offered as Kuwait Oil and Petrochemical Industries Union workers sit in a shaded area on the first day of an official strike over public sector pay reforms, in Ahmadi, Kuwait April 17, 2016. REUTERS/Stephanie McGehee

Thousands of Kuwaiti workers agreed to return to work from Wednesday morning after staying away for three days to protest against a planned overhaul of the public sector payroll system, which they fear could lead to lower salaries and benefits as well as staff layoffs.

The government said during the strike that it would not negotiate, and late on Tuesday, the sector’s union announced it was calling off the action “in honor of his highness the Emir”. Global oil prices fell slightly in response.

The union did not elaborate on why it decided to return to work. It was not immediately clear if there would now be talks with the government on the dispute.

The strike may presage more discontent in Kuwait this year as the government, running a budget deficit because of low oil prices, seeks to rein in lavish spending on wages, social welfare and food and energy subsidies for its citizens.

The cabinet has been considering measures since last year, including hikes in prices of gasoline, other fuels and utilities, but has acted more slowly than other Gulf states in implementing such reforms because they could be opposed in parliament.

Oil production fell as low as 1.1 million barrels per day (bpd) during the strike, which was not joined by non-Kuwaiti workers in the industry. Previously, Kuwait’s output was about 3 million bpd.

Output recovered to 1.6 million bpd on Wednesday from 1.5 million bpd on Tuesday, a Kuwaiti industry source told Reuters.

Six supertankers lined up at Kuwait’s crude export terminal to load oil on Wednesday in anticipation of a return to normal, shipping data on Thomson Reuters Eikon showed.

State refiner Kuwait National Petroleum Co (KNPC) will resume its maximum production capacity in under three days, its spokesman Khaled al-Asousi told Reuters. KNPC is currently refining 530,000 bpd; before the strike, its output was 930,000 bpd.

Reporting by Ahmed Hagagy; Writing by Andrew Torchia; Editing by Andrew Torchia and Mark Potter