Kuwait’s Oil Industry Thrives Amid Calls For Economic Diversification | OilPrice.com

. This was the biggest decrease in the Arabian Gulf, a region that relies heavily on fossil fuel revenues. However, as the demand for oil went up, its economic growth rose by 1.3 percent in 2021 and 8.7 percent in 2022. This growth is expected to slow in 2023 due to lower oil prices and OPEC+ production cuts. While Kuwait’s GDP is still expected to increase by around 2.6 percent, this is lower than the regional average.

The volatility of Kuwait’s economic growth, which continues to depend heavily on oil prices and the global demand for fossil fuel, demonstrates the need for greater economic diversification. As the world undergoes a green transition, Kuwait must use some its oil revenues to invest in the economic development of other sectors, including renewable energy.

While economic diversification is key, there are plans to continue developing Kuwait’s oil and gas industry for as long as demand remains high. According to Ahmed Jaber al-Aydan, the CEO of the Kuwait Oil Company , the country’s oil production currently stands at above 2.8 million bpd and is expected to reach

. Kuwait is continuing to follow the quota cuts enforced by OPEC+ but has significant potential to raise its output to meet global demand, particularly as several countries curb their imports of Russian oil. in the next five years to increase its output by almost 200,000 bpd. KOC’s CEO al-Aydan also stated that he expects production to rise to around 4 million bpd by 2035, a level which the company could maintain until around 2040 when demand decreases in line with the global green transition.

This enthusiasm around the future of Kuwaiti oil comes following significant investment in clean-up activities. In 2022, Kuwait awarded five contracts to national and foreign firms for the clean-up of polluted regions, at a cost of almost . The KOC had plans to award more contracts for similar operations in other parts of the country. Clean-up operations are expected to be completed within four years. Kuwait has suffered from severe oil pollution since the first Gulf War in 1990.

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