Kuwait Petroleum Corp (KPC) has told customers they will have to load less crude oil in June as it has set operational tolerance at minus 5% for all crude cargoes, two sources with knowledge of the matter told Reuters on Wednesday.
The adjustment was KPC’s latest measure to meet the country’s commitment to reduce production as part of an agreement by the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.
Operational tolerance is a clause in long-term oil contracts that gives buyers the option to slightly adjust loading volumes for demand and logistical reasons. KPC has an operational tolerance of plus or minus 5%.
With immediate effect, the plus tolerance option will no longer be available to oil buyers, KPC said in a notice dated May 12, according to the sources.
The notice said the minus 5% tolerance will be applied to all cargoes nominated for loading in June, they added.
Reuters could not immediately reach KPC for comment outside of office hours.
The move followed Kuwait’s announcement of fresh oil production cuts of 80,000 barrels per day to be implemented in June, on top of the cuts already agreed under the OPEC+ pact.
OPEC+ plans to reduce output by a record 9.7 million bpd in May and June.