Energy Policy & Regulation

Kuwait’s Oil Minister, Tariq Suleiman Al-Roumi, expressed optimism about the fundamentals of the global oil market and reaffirmed Opec+’s commitment to achieving market balance, according to a statement by the state news agency, Kuna. His comments followed a virtual meeting of the Opec+ Joint Ministerial Monitoring Committee, where ministers emphasized the importance of full compliance with agreed production levels to support energy security and price stability.

Opec+, which accounts for nearly half of global oil production, has long maintained output cuts to stabilize prices. However, the alliance began increasing production this year in an effort to reclaim market share amid political pressure from major oil-consuming nations, including the United States. In April, eight member countries started boosting output, with the latest agreement targeting a 548,000-barrel-per-day increase in August. Al-Roumi stated that Kuwait supports all efforts aimed at maintaining a stable global oil market, and emphasized that Opec+ decisions are rooted in current market dynamics.

Despite its vast oil reserves, Kuwait remains heavily reliant on oil revenues and has struggled to diversify its economy. The country posted a budget deficit of $5.23 billion for the 2023/24 fiscal year, largely due to declining oil revenues, which were based on an average crude price of $86.36 per barrel. The government continues to explore fiscal measures, including the issuance of bonds, such as a recent $500 million batch, to bridge the budget gap.

Looking ahead, Kuwait’s draft budget for the 2025/26 fiscal year projects a much larger deficit of $20.43 billion. This increase is tied to an expected 5.7% drop in oil revenues, based on a more conservative oil price estimate of $68 per barrel, according to the finance ministry. As the country grapples with economic pressure and limited revenue diversification, the success of Opec+ strategies will remain crucial to Kuwait's financial stability.