2025-10-01
Kuwait Petroleum Sees Strong Oil Demand Justifying OPEC+ Boost
Global oil demand continues to expand at a rate that justifies the supply increases coming out of Opec+, according to the chief executive officer of Kuwait Petroleum Corp.
“It’s a market that’s been more resilient than initially expected by some traders,” Sheikh Nawaf al-Sabah said in an interview. “Therefore you’re seeing a slow but methodical and planned increase in supply coming in from the Opec+ countries that has led to a relative stability in prices.” The developments have “reinforced” his view that demand will continue to rise, he added.
The Organisation of the Petroleum Exporting Countries (Opec) and its allies are pursuing a strategy to reclaim market share after years of restraint, bringing back an additional layer of idled output. Still, oil prices have held up reasonably well so far as global summer demand has helped absorb the additional barrels.
That might change in the months ahead as some of the consumption starts to ease. The International Energy Agency is projecting a record glut in 2026 as Opec+ continues to revive production and supply from the group’s rivals climbs.
Sheikh Nawaf, nevertheless, expects China’s oil use to stay robust. Major business partners there see “quite a strong increase” in demand now and decades into the future, he said. The view reflects that of Kuwait’s Opec partner Saudi Arabia.
The state-owned Kuwaiti firm, which is on a 10-15bn-dinar ($33-50bn) spending drive to ramp up oil production capacity, signed a 10-year agreement with China over the past year for 300,000 barrels a day of supply.
“Someone who signs that is not worried about demand destruction,” Sheikh Nawaf said. “The Kuwaiti barrel represents a long-term stable secure supply situation where customers are eager to lock in that supply for decades to come.” Kuwait, Opec’s fifth-largest producer, has “significant” spare capacity that’s maintained for strategic reasons and readily available for the market if needed, he added. For now, he considers the market “relatively balanced.”
The alliance led by Saudi Arabia is considering raising output again in November, though at a modest rate similar to that for October. So far, the oil market has absorbed additional barrels from the group without significant ructions.
KPC’s outlay is part of an investment program that started last year and covers everything from upstream to petrochemicals. Funding will be supported by cash reserves, conventional loans, potential lease and leaseback deals, in addition to profits retained from the previous two fiscal years.
“We have quite a lot of debt capacity at KPC, since we are currently under leveraged, and that should give us an opportunity to obtain relatively cheap funds to pay for our expansion plans,” he said.
“It’s a market that’s been more resilient than initially expected by some traders,” Sheikh Nawaf al-Sabah said in an interview. “Therefore you’re seeing a slow but methodical and planned increase in supply coming in from the Opec+ countries that has led to a relative stability in prices.” The developments have “reinforced” his view that demand will continue to rise, he added.
The Organisation of the Petroleum Exporting Countries (Opec) and its allies are pursuing a strategy to reclaim market share after years of restraint, bringing back an additional layer of idled output. Still, oil prices have held up reasonably well so far as global summer demand has helped absorb the additional barrels.
That might change in the months ahead as some of the consumption starts to ease. The International Energy Agency is projecting a record glut in 2026 as Opec+ continues to revive production and supply from the group’s rivals climbs.
Sheikh Nawaf, nevertheless, expects China’s oil use to stay robust. Major business partners there see “quite a strong increase” in demand now and decades into the future, he said. The view reflects that of Kuwait’s Opec partner Saudi Arabia.
The state-owned Kuwaiti firm, which is on a 10-15bn-dinar ($33-50bn) spending drive to ramp up oil production capacity, signed a 10-year agreement with China over the past year for 300,000 barrels a day of supply.
“Someone who signs that is not worried about demand destruction,” Sheikh Nawaf said. “The Kuwaiti barrel represents a long-term stable secure supply situation where customers are eager to lock in that supply for decades to come.” Kuwait, Opec’s fifth-largest producer, has “significant” spare capacity that’s maintained for strategic reasons and readily available for the market if needed, he added. For now, he considers the market “relatively balanced.”
The alliance led by Saudi Arabia is considering raising output again in November, though at a modest rate similar to that for October. So far, the oil market has absorbed additional barrels from the group without significant ructions.
KPC’s outlay is part of an investment program that started last year and covers everything from upstream to petrochemicals. Funding will be supported by cash reserves, conventional loans, potential lease and leaseback deals, in addition to profits retained from the previous two fiscal years.
“We have quite a lot of debt capacity at KPC, since we are currently under leveraged, and that should give us an opportunity to obtain relatively cheap funds to pay for our expansion plans,” he said.
Source: GULF TIMES