KUWAIT CITY, April 3: Contrary to conservative projections set by the government for the fiscal year 2024- 2025, Kuwaiti oil prices surged to $88.2 per barrel, nearing the budgetary break-even point of $90.7 per barrel, reports Al-Qabas daily. This unexpected increase presents an opportunity to mitigate the anticipated deficit of 5.8 billion dinars outlined in the new budget.

With oil prices on an upward trajectory since the year’s onset, the government’s focus on expenditure rationalization, accelerating profitable development projects, and income diversification further supports the potential for deficit reduction. Key highlights of the new fiscal year include expected revenues of 18.7 billion dinars, projected expenses of 24.5 billion dinars, and an estimated deficit of 5.8 billion dinars, against the backdrop of an anticipated $70 per barrel oil price, now outpaced by market realities.

Factors contributing to the oil price surge include production cuts by the Organization of the Petroleum Exporting Countries and its allies, offsetting increased supplies elsewhere. Expectations of ongoing production policies by the OPEC+ alliance and geopolitical tensions impacting Russia’s energy infrastructure have also bolstered prices. Additionally, recovering US refinery activity and declining drilling rig numbers indicate potential future supply constraints. However, challenges such as the strengthening US dollar, unexpected rises in US crude inventories and gasoline stocks, and hopes for de-escalation of Middle East tensions may temper further price increases.