Kuwait Affirms China’s Oil Consumption Trend is Here to Stay
According to OPEC member Kuwait, oil consumption in China is seeing a significant rise following the end of COVID-19 lockdowns, with the country being the largest oil importer globally.
The CEO of Kuwait Petroleum Corp, Sheikh Nawaf Al-Sabah, stated that there is a built-up demand from the pandemic and the lifting of restrictions has led to a sustained increase in demand, not just a temporary spike.
Energy traders are closely monitoring China’s recovery, which is deemed to be the primary factor affecting oil prices this year.
Sheikh Nawaf’s current outlook is more optimistic than his comments from early December, where he expressed concerns about oil demand and a lack of willingness from Asian customers to increase imports.
Brent crude has fallen nearly 7% since the end of December, due to some patchy economic data from China. Nevertheless, analysts from Goldman Sachs and Morgan Stanley predict that Brent will rise above $100 per barrel in the latter half of the year.
Kuwait is the fourth-largest crude producer in OPEC and exports approximately 2 million barrels per day, which accounts for 2% of global supply. China is the largest buyer of Kuwaiti oil.
The CEO of Kuwait’s national energy company, KPC, announced that the company plans to allocate approximately $80 billion for capital spending in the next five years.
This investment is aimed at increasing production capacity from its current 2.9 million barrels per day to 3 million barrels and eventually reaching 4 million by 2035.
KPC is also considering setting up a trading arm, similar to other regional energy companies like Saudi Aramco, Adnoc, and Qatar Energy.
The company aims to increase its exports of refined products, such as diesel and jet fuel, to Europe this year in response to the ban on almost all refined fuels from Russia.
The CEO stated that they are seeking to fill the supply gap caused by the ban with the extra volumes of diesel fuel oil from their massive Al Zour refinery, which has three lines with the first one currently operating and the second starting soon.
He made these remarks at the India Energy Week forum as part of India’s G20 presidency.