Average price of Kuwaiti oil barrel stood at around $80.9 in Jan 2024

The Al-Shall reported the conclusion of January 2024, marking the end of the tenth month of the current fiscal year 2023-2024. The average price of a barrel of oil during this period was approximately $84.7.

In January 2024, the average price of a barrel of Kuwaiti oil stood at around $80.9, surpassing the new hypothetical price estimated in the current budget of $70 per barrel by $10.9 or 15.6%, reports Al-Jarida daily.

Comparatively, the last fiscal year 2022-2023 achieved an average price of a barrel of Kuwaiti oil at about $97.1. The average price for January 2024 was approximately 16.7% lower than the average for the previous fiscal year and 12.9% lower than the break-even price of $92.9, as estimated by the Ministry of Finance after discontinuing the 10% deduction for the Future Generations Reserve.

Assuming Kuwait’s oil revenues for January were approximately 1.575 billion dinars and projecting production levels according to recent OPEC+ decisions, the expected total oil revenues, after deducting costs for the entire fiscal year, may amount to around 20.793 billion dinars.

This figure is significantly higher, by about 3.624 billion dinars, than the estimated budget for the current fiscal year, which stands at about 17.169 billion dinars. Considering an additional 2.298 billion dinars from non-oil revenues, the total budget revenues for the current fiscal year are projected to reach around 23.091 billion dinars.

In light of expenditure allocations amounting to about 26.279 billion dinars, it is likely that the general budget for the current fiscal year 2023-2024 will incur a deficit of 3.187 billion dinars. However, the determining factor for the size of the deficit or surplus remains oil revenues, with any adjustments in public expenditures contributing to potential deficit reduction or surplus increase.