Kuwait’s oil sector is falling further behind its peers as its 2020 upstream strategy lies in tatters. Political activism has long obstructed oil and gas development and a brief reprieve during 2013-16 now appears a distant memory.

Ten years ago Kuwait was tussling with Iraq to be Opec’s third largest producer. But the intervening years have seen it lag behind its peers to the point where it is now the fifth largest and dependent on US Iran sanctions to leapfrog Iran back into...