Kuwait’s oil income to hit record in 2012

Strong oil prices along with high output will boost kuwait’s hydrocarbon export earnings to a record high of more than $114 billion in 2012 and the increase will widen its current account and fiscal surplus, according to the IMF.

Kuwait earned a record high of $98.7 billion from its oil sales in 2011 after crude prices climbed to all time high of more than $105 a barrel and the emirate pumped at one of its highest levels of nearly 2.6 million bpd of oil.

The 2011 income was more than 50 per cent above the Gulf emirate’s 2010 oil revenue of about $61.8 billion as crude prices were just above $70 a barrel.

Oil prices are projected to average above $100 this year and high crude supply could allow Kuwait to net its highest income from oil exports of around $114.4 billion in 2012, the International Monetary Fund said.

Earnings are projected to slip in 2013 but will remain as high as $105.4 billion as the IMF expects crude prices and the emirate’s production to remain high.

Higher oil exports will allow Kuwait, a key OPEC member, to record its highest current account surplus of around $88.4 billion in 2012 compared with the record surplus of nearly $70.8 billion in 2011, the IMF report showed.

The surplus is projected to fall back to around $76.2 billion in 2013 but remains one of the highest account balances recorded by the Gulf country.

The surge in the income could also allow Kuwait, which controls nearly seven per cent of the world’s proven oil deposits, to record its highest fiscal surplus of around KD19.9 billion ($71.6 billion) in the 2012-2013 fiscal year, the IMF said.

Kuwait had forecast a deficit of KD4.4 billion ($15.8 billion) for its 2012-2013 budget but it assumed a conservative oil price of around $60, more than 50 per cent below the expected actual price.

The IMF report showed budgeted revenue of KD13.6 billion could nearly triple to about KD36.8 billion in 2012-2013 while actual expenditure could be cut to around KD20 billion from a budgeted KD22.1 billion.

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