03/10/2026
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03/10/2026
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Kamel Al-Harami
Brent and other price indicators are hovering around $100, and prices appear likely to remain at these levels for the remainder of the year. There are currently no signs of significant weakening. This is good news for oil-producing and exporting economies, which may see positive results in their year-end balance sheets. For the first time in many years, some oil-producing countries could potentially reach budgetary breakeven, reducing the need to borrow from external sources such as international banks or to sell core assets in search of cash to balance their budgets.
Oil prices, meanwhile, remain strong at above $100 a barrel, bringing relief to oil-producing countries for the time being. The challenge, however, for oil-producing countries is to keep expenses under control year after year. But this is difficult with growing populations and ongoing infrastructure development. Most importantly, countries must seek to advance job creation and generate employment opportunities through international investments and domestic economic activity, despite the limited opportunities available. The challenge for us in Kuwait, however, is finding and creating job opportunities for new college graduates, particularly with no major new industries coming on stream.
The only major industry currently available is oil. With our three domestic refineries and three refineries outside Kuwait, located in Oman, the Arab Gulf, Thailand, and Italy, employment opportunities will remain limited due to advances in technology. Refineries can no longer employ the same number of workers they once did. The smaller the workforce, the better the financial results, particularly when labor costs are reduced. Refineries should not be used primarily as a means of absorbing excess labor.
Their workforces should remain lean, with the minimum number of employees needed to operate efficiently. It is time to review these new trends and find ways to minimize labor costs. Unfortunately, this is difficult to implement in societies where there is strong resistance to reducing employment. We realize that despite the recent increase in oil prices, it will most likely lead to higher spending and encourage the state to undertake more projects, hopefully. However, this will be difficult to sustain.
Our concern is that higher revenues will lead to higher expenditures, as meeting the demands of our communities unfortunately results in increased spending. Oil prices certainly will not remain strong for an extended period, making it necessary to seek new sources of income.
This could include increasing oil exports or finding alternatives to oil as additional sources of revenue. Perhaps we also need to consider using our sovereign wealth fund more regularly, or allocating part of its investment income to help cover and supplement our annual revenues. The time has come to think creatively and outside the box, unless we can ensure a regular and sustained increase in oil prices sufficient to cover the annual deficits of oil-producing countries. We cannot continue depending on a single source of income. From now on, we should consider using part of the annual investment returns as an additional source of income.
