Kuwait and Saudi open talks on resuming neutral zone oil production

Kuwait is holding talks with Saudi Arabia on a resumption of oil production in a neutral zone, state news reported on Thursday.

The Saudi-Kuwaiti Neutral Zone is a vast 5,770 square km territory between the two countries, which is contested between the two countries since an undefined border was established in 1922.

Joint oil production in the zone is divided equally between the two countries but output was halted four years ago following disagreements on concessions, cutting half-a-million barrels a day from the global market. 

The US has pressured Riyadh to resume production to increase oil supplies and lower prices.

Saudi energy minister Khalid al-Falih said in February that oil production in the contested area was expected do assume, following anger after Riyadh extended Chevron's Wafra concession without consulting Kuwait, according to Reuters.

The announcement saw oil prices dip after weeks of rising prices following tensions between Iran and the US in the Gulf region.