OPEC founding member Kuwait will see a leadership change soon after the death of its emir, Sheikh Sabah Al-Ahmad Al-Sabah. State-owned Kuwait News Agency announced his passing on September 29. The leadership is expected to be handed to his half-brother, Sheikh Nawaf al-Ahmed al-Sabah, who was nominated as crown prince in 2006. Nawaf has also been the country’s deputy commander of the military.
Kuwait is one of the world’s largest crude oil producers. The small Gulf state pumped a record 3.15 million bpd of oil in April, but production fell to 2.29 million bpd of mostly heavy and medium sour grades in August, as the country participated in OPEC+ coordinated supply cut deal. Kuwait is among the most compliant producers under the pact.
The late Sheikh Sabah reached an agreement with Saudi Arabia to resume oil production in the so-called Neutral Zone shared between the two Arab nations. The area can produce around 500,000 bpd of crude oil. The agreement helped Kuwait to boost production to a record level in April.
The new emir will face a period of low oil which has prompted calls to diversify the country’s economy away from oil. In March, S&P Global Ratings downgraded its long-term sovereign credit from AA to AA- due to the sharp decline in global oil prices. Kuwait’s economic reform has been slow, and it remains heavily dependent on oil revenues.
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Published on September 30, 2020 10:59 AM (GMT+8)Last Updated on September 30, 2020 12:41 PM (GMT+8)
