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Thursday , February 2 2023

OPEC: Oil Will Still Be in Demand Long Term Despite the War

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How long will oil be the major energy source worldwide? Find out the challenges that Kuwait and other nations are currently facing and possible solutions

KUWAIT CITY, Nov 11: Despite many recent events that have changed the way the world looks at energy, oil is still essential. Kuwait and the Persian Gulf region is the region that relies on oil production the most. However, is it time for the region to start rapidly adapting to the global concerns regarding international relations and climate change?

The Organization of the Petroleum Exporting Countries (OPEC) controls 80% of the world’s oil reserves and produces 43% of global crude oil production. As such, this region has a significant impact on global energy markets. Oil production is key to the region’s business and international trade.

There are a significant number of international companies in Kuwait and the region as a whole. Applicants worldwide would love to work in countries like Kuwait, Qatar, and the United Arab Emirates. Applicants even use resume building online tools to have a better chance of getting hired by a prosperous company, or sent to work in their company’s office located in the region.

At the moment, Kuwait and the other countries in the region are very desirable economically, but will that continue over the next 30 to 40 years? There are a few areas the countries will have to examine before answering that question.

Oil Demand

In recent months and years, the oil demand has skyrocketed. While in the short term that can mean huge profits, in the long term it seems to be putting the oil and gas industry at risk. Some factors have contributed to this rise in oil prices. In the short term, demand is increasing as countries around the world continue to grow their economies, and keep their citizens warm. The two major reasons for the large hike in gas and oil prices have been the pandemic and the Russian invasion of Ukraine.

Europe has been plagued by instability due to Russia’s involvement in Ukraine and Syria. Russia has always been a major seller of gas to many countries in Europe, however, due to the economic blockade, there will be very little to no gas arriving in Europe from Russia for the foreseeable future.

This has led European nations to quicken their search for long-term solutions to gas and oil. In response to these developments, Europeans have turned toward renewable sources of energy such as solar and wind power; this shift has also driven up demand for petroleum products like gasoline (to power cars) and diesel fuel. Longer-term projections show that global demand will likely peak between 2030-2035 before declining slightly as more efficient vehicles become available on the market and consumers begin using more sustainable fuels for transportation purposes. Oil and gas will likely remain important fuels until around 2050—but after that point, we may see a significant decrease in their use once electric vehicles become widespread

International Companies

There are huge international companies that can be found in Kuwait and its neighboring countries. Companies in the region have logged record results in 2022. However, these companies will need to start looking towards the future if they want to keep making record profits in the decades to come.

The United States is still set to be a huge market for the Persian Gulf area for years to come, despite the problems in Europe. The United States has been investing in Saudi Arabia, Kuwait, and Qatar since the 1940s, making these countries American allies. There are also opportunities for international workers to work in the Persian Gulf.

Trade has become stronger over the past several years between the region and America, thanks to the removal of the Muslim ban that was put in place by President Trump. By removing this ban, business between Muslim nations and the U.S. has been able to increase somewhat. Employees from both sides will have easier access to working in different countries.

Outlook for Kuwait

With rapidly rising oil prices, Kuwait and other Persian Gulf countries are looking at ways to increase production. At the moment, Kuwait is having trouble producing crude oil supplies in this period of high demand. Kuwait is also encountering some issues retaining and attracting international businesses, and a possible sharing or buyback agreement could be the solution, like Oman and other countries have done.

In both the short and long term, Kuwait and the rest of the region will have their challenges. How the country adapts to the demand for oil will be critical to its economic success. Short-term production expectations of crude oil must be met, even with various political problems facing the country. Long-term planning of renewable energy sources will also be key for Kuwait, the UAE, Saudi Arabia, and other countries in the oil-rich region.

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