Here are five important figures shaping Kuwait’s current fiscal policy, which directly affect our daily lives through spending and expenses. Over the past 10 years, the country has faced ongoing annual budget deficits, which are increasing year by year due to population growth, rising daily expenditures, and continuing subsidies that meet everyday needs. Kuwait’s budget for the current fiscal year, which began in April, is set at KD 25 billion, with projected revenues of KD 18 billion, resulting in a deficit of KD 7 billion by the end of March 2026. The budget assumes a crude oil price of $68 per barrel, FOB Mina Al-Ahmadi.
Currently, Kuwait’s crude oil price is $67 per barrel, which means the budget is short by $1 per barrel today, with uncertainty about the price by the end of March next year. Kuwait’s crude oil production currently stands at 2.55 million barrels per day and is expected to remain at this level for the rest of the fiscal year. OPEC+ has decided not to make any adjustments or hold meetings during the first quarter of next year, leaving Kuwait’s production quota unchanged at 2.55 million barrels per day.
This means that while crude oil production remains steady, other factors such as expenditures and oil prices may fl uctuate. With projected deficits approaching KD 6 billion, the government may need to borrow from international banks. At the same time, Kuwait’s overseas investments, valued at around $1 trillion, provide a long-term financial safeguard. The challenge we face is that our annual expenses continue to rise, and while our overseas investments provide long-term support, this alone is not a complete solution. Finding new sources of income is essential, though difficult, if not nearly impossible, without investing internally.
One promising avenue is the petrochemical industry. By utilizing our own resources to develop higher-value manufacturing, we can create jobs and generate new revenue for the country. We should move from being a provider of petrochemical raw materials to a full-scale manufacturing industry, creating new opportunities and sustainable growth. Unfortunately, we are facing annual deficits, and oil prices are unlikely to improve significantly in the coming years, with forecasts remaining in the $65–$75 per barrel range.
This level is insufficient to close the budget gap or cover deficits for Kuwait or neighboring Gulf states, which typically require oil prices above $90–$100 per barrel. Other oil-producing countries, such as Iraq, Iran, North African nations, and Nigeria, face similar challenges. It will take a long time for oil prices to recover, forcing oil-dependent countries to tighten budgets, reduce expenses, and urgently seek new sources of income. Relying solely on oil is no longer sustainable; financial stability must be coupled with diversification and cost management. Unless oil prices rise above $90 per barrel, which appears unlikely, it is clear that immediate action is required. Oil alone can no longer meet our financial demands and can no longer be considered the country’s savior.
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