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KUWAIT CITY, June 23: MEED magazine expects Kuwait and the Gulf states to contribute to raising the volume of oil production of OPEC member states this year, explaining that most of the increase will come from Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, reports Al- Anba daily. The magazine added that the high oil prices and the advantages of adhering to the production agreement signed by the oil producing countries “OPEC +” are enough to dispel the fears that the parties involved in the region may have, and while the Ukrainian war continues to spin out of control, it has become possible to consider the Gulf oil-exporting countries among those who reap the benefits of this war.
The magazine said in an analysis by former editor-in-chief Edmund O’Sullivan that oil prices rose to more than 130 dollars a barrel in early March, and there is consensus that these prices will remain in the range of $100 dollars in 2022 — which is 50% more than the expectations of the International Monetary Fund — and that compared to a price of less than $70 that prevailed last year. The analyst said that despite expectations of a slowdown in global oil demand, it will remain above 100 million barrels per day in 2022. This would lead the four Gulf OPEC countries to reap unexpected gains related to the Ukraine crisis by building wealth of at least $100 billion in 2022, which is equivalent to 10% of the expected gross domestic product of the four countries.
Unless the war ends quickly, oil prices above $90 will remain prevalent during 2022 and 2023, which will boost growth and export revenues for all GCC countries. Although Saudi Arabia is the only one among the four countries that expects a budget deficit this year, the positive effects of the Ukrainian war will erase this deficit, and the kingdom has been able to reduce government debt to less than 30% of GDP. The analyst went on to say that the European Union’s intention to reduce Russian gas imports means, in turn, an increase in demand from other exporters, and Qatar may benefit greatly from this development, but not in the near future.
Since the GCC countries depend on importing foodstuffs, they will be affected by the rise in grain prices caused by the disruption of Russian and Ukrainian wheat exports, which represent half of the imports of both Oman and Saudi Arabia, but the increase in their revenues from hydrocarbon sales will be able to cope with the rise in prices in the Gulf markets.
The influence of the Gulf OPEC countries on global energy policies has been enhanced as a result of their commitment to the “OPEC +” agreement with Moscow to maintain the relations that have developed since the dissolution of the Soviet Union in 1991, and despite the United States’ resentment at the GCC’s refusal to stand by it, it avoids disagreement Public relations with it, which is considered a balanced behavior that benefits the Gulf states. O’Sullivan concluded by saying that while 2022 is considered a horrific year for the Ukrainians, and a bad year for the rest of the world, except for the Arab Gulf states, which are keen to bid farewell to 2022, it is stronger than it was when it began.