12/04/2026
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12/04/2026
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KUWAIT CITY, April 12: How long will Kuwaiti oil remain under the control of the Strait of Hormuz? How much did the oil sector lose as a result of the declaration of force majeure and the halt in Kuwaiti oil exports? Which is better for covering the budget deficit after the decline in oil revenues - drawing from the Future Generations Fund or resorting to public debt?
These questions and others were addressed to the daily by two experts in the local and Gulf economies, who emphasized the need to diversify income sources so that Kuwait’s economy does not remain indefinitely dependent on oil revenues.
Dr. Sadiq Al-Bassam, Head of the Accounting Department at Kuwait University, estimated the losses to the Kuwaiti oil sector resulting from the closure of the Strait of Hormuz during the 40-day war at approximately $7.176 billion. Dr. Al-Bassam based his calculations on the fact that Kuwait was exporting approximately 2.6 million barrels of oil daily before the war, according to its OPEC+ quota, amounting to 104 million barrels over the 40 days. He also based his calculations on the price of Kuwaiti oil being approximately $69 per barrel just hours before the outbreak of the war on February 28.
Dr. Al-Bassam explained that the losses would not stop there but would continue even after the war ended, especially since Kuwait might need several months to return to its usual production levels of approximately 2.6 million barrels of oil per day, according to statements issued by the Kuwait Petroleum Corporation (KPC). The losses were significant and would inevitably increase the current budget deficit.
In response to a question about whether it was better to draw from the Future Generations Fund or to borrow through public debt, he explained that although Kuwait’s sovereign wealth fund maintains its fifth-place ranking globally, its returns would inevitably be affected this year. Profits would decline, as with other global sovereign wealth funds, due to the economic crisis that struck global markets as a result of the closure of the Strait of Hormuz throughout the war. It would be better to resort to public debt to cover the current budget deficit and preserve the assets of the Kuwaiti sovereign wealth fund.
Dr. Al-Bassam stressed the necessity of reaching a solution that would ensure that a scenario involving the closure of the Strait of Hormuz would not be repeated under any circumstances. He stressed the importance of taking steps to diversify income sources so that Kuwait is not left dependent on oil markets and their frequent fluctuations.
Dr. Al-Bassam highlighted that diversification of income sources should be achieved through the implementation of medium and large industrial projects, especially since Kuwait possesses the potential for industrial expansion. He noted the anticipated role of Mubarak Al-Kabeer Port in expanding Kuwaiti exports, and stressed the importance of expanding agricultural investments to strengthen food security, particularly in the event of future disruptions to food supply chains. Dr. Al-Bassam emphasized the necessity of economic cooperation and coordination among the Gulf Cooperation Council (GCC) countries to confront any future economic challenges.
He affirmed that Gulf economic integration is no longer merely a hope or aspiration, but an urgent necessity to strengthen common Gulf markets by increasing trade volumes and establishing joint projects that support Gulf economies. Dr. Al-Bassam pointed to the importance of securing alternatives to ensure the continued export of oil, especially since the closure of the Strait of Hormuz has created the beginnings of a food crisis in the region.
He praised the role of the Kingdom of Saudi Arabia in securing food supply chains for Kuwait, in addition to opening its airspace to allow the return of Kuwaitis stranded in other countries during the war, after operations at Kuwait International Airport were suspended. On his side, Dr. Ibrahim Al- Shukri, Director General of the Gulf Center for Information and Documentation, stressed the need for Kuwait to learn from the experience of the 40-day war, which led to the cessation of Kuwaiti oil production and exports. He emphasized the importance of seeking alternative export routes for oil that would not be subject to regional geopolitical tensions.
Dr. Al-Shukri proposed the establishment of an oil pipeline network encompassing all GCC countries, through which Gulf oil could be exported via the Arabian Sea through the Sultanate of Oman, or by sea through the Kingdom of Saudi Arabia, in the event of any future geopolitical tensions in the Strait of Hormuz or Bab el-Mandeb. He stressed that Gulf economic integration has become a strategic necessity for strengthening the GCC system. Dr. Al-Shukri pointed out that such integration will inevitably lead to the exchange of expertise and the diversification of income sources, so that Gulf economies are no longer dependent on oil as their primary and sole source of revenue. He commended the Kuwaiti government’s efforts to diversify income sources and increase non-oil revenues.
By Najeh Bilal Al-Seyassah/Arab Times Staff
