Six essential figures define the Kuwaiti economy and shape our economic situation, thereby explaining our 2025–2026 budget. These figures indicate the breakdown, borrowing needs and available options. Our budget calls for total expenses of KD24 billion, with a deficit of KD6 billion. The budget is based on Kuwait exporting crude oil at $68 per barrel, while our breakeven price must be $90 a barrel. This is far-fetched, as our budget falls short by about $23 per barrel. The current price of Kuwait crude stands at $67 per barrel, meaning it is highly unlikely for prices to reach such a level.

Oil prices are not expected to go above $70 per barrel in the next few years—certainly not next year nor in 2027. OPEC+ is not yet in a position to take any action while losing volume to other oil-producing countries. OPEC+ is essentially saying, “Enough sacrifices. Let the oil market do its own magic.” More oil-producing countries may join the organization to strengthen its influence, provided there is no cheating among members and there is full adherence to OPEC quotas. Simply put, a more disciplined organization is required to remain reliable and respected in its decisions and actions. Our current budget shows a shortage of KD6 billion or $18 billion, which must be financed through the safest or cheapest means. Two viable options are available. The first is to borrow from the open market by obtaining loans from international banks for three or four years. The second is to sell some of our overseas sovereign wealth fund assets.

Naturally, the preferred decision is short-term borrowing, avoiding the need to use or sell our overseas assets. Short-term borrowing is easier and cheaper, as Kuwait is endowed with vast oil reserves and substantial overseas investments and assets worth more than $1 trillion. Let these assets remain in international markets, earning returns and preserved for future generations. Certainly, Kuwait will pursue additional borrowing as annual budgets continue to grow to provide for new graduates, create new jobs, and increase salaries under normal economic growth. Meanwhile, the price of oil —the only and main source of income—is static. The price per barrel is not expected to rise to a level that covers our upcoming deficits. In other words, oil prices will not reach higher levels this year and will remain in the $60s or barely at $70, while our need is around $90 per barrel to meet the current budget.

Oil prices are not going to rise sufficiently, making replacement or diversification necessary—specifically, the need for a long-term alternative source of income. The recent gas discoveries in three offshore areas near Failaka Island are an encouraging sign for gas development in Kuwait. Complete gas fields have been identified in Jazaa, Juliaia, and a third in Noukhtha. This is certainly great news and could serve as a secondary source of income or savings by reducing the need to import gas worth about $4–5 billion annually. This will complement our oil resources and save substantial cost, with gas being more environmentally friendly. It is a promising discovery that prepares our next generation for cleaner energy and a second source of income and power. Kuwait’s economic figures, with gas expected to be on stream in the next four years, will gain value through clean energy, increased income, and greater national wealth. We should not forget, at this early stage, to invite international oil companies to help in developing these new gas discoveries.

There is no excuse not to invite them to support us with this new venture. As we are new to gas development, international oil companies should come in and assist us in the early stages. Gas is a great and promising discovery, and international oil companies are already knocking on our doors. Soon, we will be writing more about our gas fields, their figures, their added value in terms of savings, and even the potential for exporting gas. Definitely, this is a new venture and another significant figure to be added to Kuwait’s economy. Now Kuwait is an oil and gas-producing country.

By Kamel Al-Harami, Independent Oil Analyst

e-mail: a.alsarraf@alqabas. com.kw