Kuwait raises oil output in line with Opec+ accord to meet growing demand

Opec's fourth-largest producer is increasing its crude production in line with its committed 2.81 million barrels per day

Kuwait is raising its oil production to ensure the stability of supply globally. Getty

Kuwait has ramped up its crude oil production in line with the Opec+ output accord to meet growing demand, Deputy Prime Minister and Minister of Oil Mohammad Al-Faris has said.

Opec's fourth-largest member has increased its production to meet its commitment of 2.81 million barrels per day, Mr Al-Faris said, according to a statement carried by the Ministry of Oil on Wednesday.

The output increase adheres to Kuwait’s “commitment to ensure secure and stable supplies of oil to the international markets”, the statement said.

“The increased production is consistent with announcements made by the Kuwait Petroleum Corporation that it is bringing on line investments that ensure international oil markets are adequately supplied and can meet the expected future demand.”

Kuwait will continue to support efforts to promote market stability through the Opec+ alliance of 23 oil producers, which is led by Saudi Arabia and Russia, Mr Al-Faris said.

“Since 2020, Opec+ successfully restored and maintained oil market balance and stability by ensuring adequate supplies to markets,” he said.

But Mr Al-Faris also warned and repeated statements made by other energy ministers and industry analysts that “structural supply weaknesses caused by years of underinvestment have led to extremely limited worldwide spare capacity”.

This situation has contributed to “extraordinary volatility in the oil markets at a time when these markets need stability like never before to allow participants to plan future production capacity increases to meet rising demand”, he said.

“Kuwait supports all efforts designed to protect market stability against the recent harmful volatility that threatens to undermine the basic functions of the market,” Mr Al-Faris said.

Brent, the global benchmark for two thirds of the world's oil, was trading 1.07 per cent higher at $101.30 a barrel at 3.50pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 1.01 per cent at $94.69 a barrel.

"Crude prices are rallying as the dollar’s rally came to abrupt halt on growth concerns," said Edward Moya, a senior market analyst at Oanda.

"The oil market will remain tight whether business activity continues to weaken sharply or if economic growth remains choppy."

Opec+, which will meet on September 5 to assess the state of the oil market, agreed earlier this month to raise production by another 100,000 bpd next month amid pressure from major consumers, including the US, to cool prices.

However, oil has given up most of its gains since then amid mounting concerns over the possibility that a looming global recession could hit fuel demand.

Last month, the International Monetary Fund lowered its growth forecast for the global economy to 3.2 per cent this year, from its previous forecast of 3.6 per cent in April due to Russia’s war in Ukraine, high inflation and the Covid-19 pandemic.

Oil prices have edged up this week after Saudi Arabia, the world’s largest exporter of crude, said the Opec+ group can cut output if required to deal with the current volatility in oil markets.

Prince Abdulaziz bin Salman, Saudi Arabia's energy minister, in an interview with Bloomberg on Monday, said Opec and its allies "have the commitment … and the means” to deal with volatility on prices and “provide guidance including cutting production at any time and in different forms”.