Mubasher: Kuwait’s oil revenues decreased by 16.7% on an annual basis during the first 11 months of the fiscal year (FY) 2019/2020, according to recent data by the Ministry of Finance.
Revenues for the period amounted to KWD 14.31 billion ($46.46 billion) over the eleven-month period ended on 29 February 2020, compared to KWD 17.15 billion ($55.68 billion) in the same period a year earlier, representing 103.2% of the KWD 13.86 billion estimated revenue for FY19/20.
The falling revenues were fuelled by the Gulf state’s commitment with OPEC+ to trim oil output, not to mention the global panic over the widespread of the coronavirus (COVID-19) pandemic, which is weighing heavily on the global demand and has caused major cities around the globe to completely shut down.
Another negative factor is the crude price war, which was triggered between OPEC and Russia as the latter refused to reduce supplies by another 1.5 million barrels per day, a deal that was seen to counter the weakening demand.
Additionally, Saudi Arabia and the UAE plan to increase their output.
Saudi Arabia and Kuwait slashed crude prices, in an attempt to dominate the oil market and offset the price plunge.
Kuwait’s budget deficit increased by KWD 1.825 billion ($5.9 billion) over the eleven-month period, after transfers to the Future Generations Fund’s reserve, which represents 10% of the country’s total revenues.
It is worth pinpointing that Kuwait is the world’s eighth-largest crude producer with the ninth-largest oil reserve globally, in addition to existing reserves sufficient for 100 years ahead.
The Kuwaiti fiscal year starts in April every year and ends in March the following year.