KUWAIT CITY, Nov 2: Kuwait Petroleum Corporation (KPC) must expand its foreign oil storage capacity to include all other countries that import Kuwaiti oil, says on oil sector source. The source praised the policy of KPC to prioritize oil storage in China and South Korea, considering the current global political tensions that are negatively impacting the oil market. The source cited the economic sanctions, particularly those targeting oil, imposed by the United States of America (USA) on Russia a week ago to pressure President Vladimir Putin to end the war in Ukraine. The source emphasized that these sanctions could lead to the price of a barrel of oil exceeding $150, prompting urgent meetings of OPEC+ countries to increase their production quotas. The source explained that if this occurs, Kuwait will have a prime opportunity to demand an increase in its quota, especially since it has been one of the most compliant countries with the OPEC+ production cuts implemented since the end of 2022.

The source affirmed that these sanctions will cause a surge in global oil prices, because Russia’s daily production exceeds seven million barrels – seven percent of global oil production. The source pointed out that most of this Russian oil is destined for China, which is the largest recipient of Russian oil at 47 percent, followed by India at 35 percent.

The source clarified that the direct effects of these sanctions have not yet materialized, as Russian oil shipments take a long time to reach their destinations. The source added that the heightened tensions and disputes between the USA and China since the return of Donald Trump to the American presidency might make China the last country to comply with the sanctions imposed on Russian oil.

The source indicated that the European Union (EU) countries, which consume less Russian oil, may be the cornerstone for enforcing the sanctions and penalizing any companies that violate them. The source stressed that compliance with these sanctions by all countries consuming Russian oil and its derivatives will lead to a significant shock in the oil market, in particular. The source hinted that Putin might respond to international pressure and end the war with Ukraine, as Russian oil revenues are the primary source of funding for the war, which has now lasted for more than three years.

By Najeh Bilal Al-Seyassah/Arab Times Staff