Reassurance... the barrel is above $100!

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Despite the reassurance that the price of a barrel of oil has exceeded $100, the question remains: Will it remain at this level beyond next year? OPEC+ countries are committed to the current production ceiling, which amounts to approximately 38 million barrels per day, taking into account that some of its members, such as Iran, Libya and Venezuela, remain outside the scope of the production quota, and the UAE’s exit from OPEC and OPEC+?

Currently, the average price per barrel ranges from $103 to more than $133 per barrel for Russian crude oil, while the price of a barrel of Kuwaiti crude oil is more than $118, which is higher than the break-even price of the State of Kuwait’s budget for the current fiscal year by about $22 per barrel, which is $95 per barrel.

Most importantly, the price of a barrel remains at this rate, so that Kuwait can reduce its expected financial deficit by the end of next March. Otherwise, it will tend to borrow from foreign international banks if the expenditure ceiling remains as it is currently.

The question is: Why doesn't Kuwait borrow, for example, over the next several years instead of annual borrowing, and almost at the end of every fiscal year, as long as it will face the same problem annually?

While we know that Kuwait will face future financial deficits, it is not about to reduce budget numbers and expected financial expenditures, while creating new jobs in the country in order to absorb graduates from various institutes and universities from inside and outside the country. It is the state's responsibility to find jobs for them and for every Kuwaiti citizen. This may also be due to accelerating the process of referring state employees to early retirement.

From here begins the focus on the private sector and accommodating new graduates as much as possible, especially with the private sector’s fear regarding working hours and strict adherence to appointments. But in the end, he will be rewarded according to his productivity, without interference or intermediaries. Here comes the role of the private sector in educating graduates and communicating with them before graduation, for example, and trying to assimilate them, just as oil companies operating in Kuwait work and communicate with them.

As the Kuwait Oil Company used to operate in the past, and in the days of the American Gulf and British companies, it communicated with students abroad before their graduation period and encouraged them to work for it, and to employ the largest number of Kuwaiti graduates. The most important thing is that this be done without intermediaries and interference. Current national companies can do the same thing, and then encourage students to excel in studies, and then enroll them in them. Excellence is the only condition, with superior grades, for example, at 3.5 points or higher, and this is an incentive and an attractive source of employment.

The important thing is that Kuwait has the best advanced refineries in the world, especially the joint Duqm refinery, and foreign refineries, which should motivate graduates to work there and employ them in Oman, Vietnam, and Milan, Italy, or even send them abroad from local refineries, so that “National Petroleum” becomes a source of work in the future in refineries that require competencies and experience in the field of refining.

This is Kuwait's advantage, and the first among the GCC and Asian countries in the refining sector and investment in this technical and competitive field. Experience extends from building refineries to closing refineries, whether in Europe, working with trade unions to reduce employment, or worse than that, closing refineries and confronting unions, which always ends with compromise and compensation mechanisms. It also ends with acquiring years of negotiating experience with various trade unions in Europe. The oil numbers are very competitive, as more than 4 refineries in Europe have been closed, with full negotiations with the various unions to reach a complete understanding, as well as with the various European governments, as merely threatening to close an industrial complex will lead to cutting off the livelihoods of its workers. But at the same time, Kuwait's oil investments in fuel distribution stations, as well as its operations, must be preserved.

Let the price of a barrel of oil continue at the current rate. This may always be annoying to the final consumer, but the indicators of the current rate of financial inflation are not due to the price of gasoline, but rather to the current upward economic trend.

Reducing the price of oil is not in the hands of the current US administration. Otherwise, how can the rise in the price of US crude oil to more than $103 per barrel be explained? At a time when America imports oil from Russia! Isn't the price of Russian oil the highest in the world, at $132 per barrel?