Even before the current spate of Saudi-led lunacy in the shape of the oil price war with the two biggest oil producers in the world loomed into view, Kuwait’s 2020/21 budget projected a KWD 9.2 billion (US$30 billion) deficit. This will be the sixth year of enormous deficits for the country due to initially production curbs due to the OPEC+ deals and then to plummeting oil prices thanks to the Saudis. Kuwait’s Finance Minister, Mariam al-Aqeel, underlined at that point that the budget breakeven price was US$81 per barrel of Brent, but now of course it is much higher, in keeping with all other OPEC members that followed Saudi Arabia into the ranks of the intellectually bereft.

Al-Aqeel added that the government was likely to try to fill the gap from the state reserve fund to finance the deficit because the National Assembly has so far refused to approve a public debt law that would raise the ceiling on maximum public debt to KWD25 billion dinars. In short, Kuwait, like all of Saudi Arabia’s followers, is in deep trouble and needs every source of revenue it can get, beginning with new oil exports from the Partitioned Neutral Zone (PNZ) that it shares with Saudi.

In this context, Kuwait’s Oil Ministry announced last week that the first shipment of Al Khafji crude oil from joint operations in the PNZ has been exported, and a tanker carrying two million barrels of crude oil is headed to Asia. This shipment comes some five years after the Saudis closed the joint operations in the PNZ for the official reason that the site was not compliant with new environmental air emission standards issued by Saudi Arabia’s Presidency of Meteorology and Environment Authority. According to this ‘august’ agency, a gas leak had sprung in one of its 15 platforms (in addition to producing around 280,000-300,000 barrels per day [bpd] of crude just before its closure the site also produced around 125 million standard cubic feet per day of associated gases). The real reason was that Saudi wanted to show its neighbour who was boss as Kuwait had been increasing its competition to Saudi Arabia in the key Asian export markets at that point to the degree that it was selling oil to buyers in Asia at the widest discount to the comparable Saudi grade for 10 years.