Rise in prices in China, a new blow to oil contractors in Kuwait

This news has been read 18347 times!

Kuwaiti contractors left with very few options

KUWAIT CITY, May 31: The MEED magazine addressed the difficulties experienced by contracting companies operating in the oil field in Kuwait in obtaining metal sheet and pipeline materials, due to the increasing problems related to importing materials from Ukraine, Russia and China, reports Al-Rai daily. The magazine revealed due to the current situation, contractors are currently looking for options to purchase these materials from India, according to what the magazine quoted informed sources in the industry as saying.

MEED pointed out that among the factors affecting prices were US President Joe Biden’s comments on May 23, when he said that the United States would intervene militarily if China tried to control Taiwan by force. “Along with other factors, the US president’s speech regarding Taiwan has caused prices to rise in China,” one of the sources said. Biden’s comments about military intervention, an additional price slap, had an immediate effect on the prices that Kuwaiti contractors get to buy sheet metal from Shanghai. “Rising tensions mean increased uncertainty, and that means higher prices on the ground for those seeking shipments from China,” the source said.

During 2022, the shutdown in China due to COVID-19 has already disrupted the shipment of materials from Shanghai Port to Kuwait. Another source said: “Pandemicrelated shipment disruptions are continuing, and the problems have been exacerbated by the heightened tensions between the United States and China.” MEED confirmed that the options left to Kuwaiti contractors are very few when it comes to reliable sources for importing construction materials. The magazine had reported last March that the Kuwait Petroleum Corporation had asked contractors operating in the country not to use Russian sellers for future projects, amid concerns about sanctions and possible disruption to supply chains. The ban on the use of Russian suppliers came in the wake of the Russian invasion of Ukraine. As the war continued, facilities producing construction materials for export in Ukraine increasingly halted shipments, either because they were damaged, or as a result of export routes being disrupted, or to run them in the manufacture of materials for the war effort.

“With many companies in Ukraine, Russia and China now unable to supply reliable export companies, contractors have been forced to look to import materials from other countries,” MEED sources said, noting that at present, companies in India are proving to be the most attractive supplier and the most reliable. “It is uncertain how long material prices from India will remain stable. Everything is completely unstable at the moment,” said the sources. It is worth noting that the oil and gas sector in Kuwait has already been suffering over recent years from the implementation of planned projects amid the ongoing political deadlock, and supply chain problems related to the pandemic.

This news has been read 18347 times!

Related Articles

Back to top button

Advt Blocker Detected

Kindly disable the Ad blocker

Verified by MonsterInsights