Kuwait Earns $13.67 Billion From Oil Sales

KUWAIT CITY, 6 November 2004 — Sustained high oil prices have earned Kuwait 4.02 billion dinars ($13.67 billion) seven months into its fiscal year, widely surpassing projected oil earnings, the independent al-Shall economic consultants said yesterday.

The price for Kuwait Export Crude for the first seven months of the fiscal year beginning April 1, 2004 averaged at around 34.40 dollars per barrel — 129 percent higher than the state’s budget projection of 15 dollars per barrel, Al-Shall said in its latest report.

Kuwait’s “realized” oil revenues up to the end of October came to 4.02 billion dinars ($13.67 billion), 47 percent higher than estimated oil revenues for the entire year of 2.73 billion dinars ($9.28 billion), said the report.

Since Kuwait was able to fetch even higher prices for what it sells as refined products, comprising slightly less than 50 percent of its average 2.5 million barrels per day output of crude, Al-Shall further estimated that the state could have actually earned up to 5 billion dinars ($17 billion) in oil, for the seven-month period.

If prices stay high throughout the remaining five months of the fiscal year, the emirate could earn as much as 8.6 billion dinars ($29.25 billion) in total oil revenues, which would surpass most records of oil income for the country, the economists noted.

Oil prices over the past months have set record highs of more than $50 per barrel, especially for benchmark West Texas Intermediate and Brent crudes.

Growing global demand for oil, especially in China, hurricanes in the Gulf of Mexico, industry worker strikes, political unrest in the Middle East and speculative oil market trading have all contributed to the rise in oil prices.

“While the International Monetary Fund and International Energy Agency both expect high oil prices to mildly lower growth prospects, the state of the global economy and thus oil demand are expected to remain robust throughout next year (2005),” said the latest economic brief issued at the end of October by the National Bank of Kuwait (NBK).