Kuwait National Petroleum Posts $700m+ Profit Despite a Rough Year

In January, the Organization of Petroleum Exporting Countries (OPEC) implemented a deal that helped set a floor price for petroleum at about $50 per barrel, which was intended to give members a safeguard against taking too much of a loss in the current market conditions. However, an increase in production has somewhat offset the positive effect of the deal, and in a market report released by OPEC in April, it was stated that Kuwait's crude oil sales declined by more than 5% during the month of February. Despite the decline and other turbulence caused by various factors, the Kuwait National Petroleum Company (KNPC) managed to record a net profit of $715 million for the fiscal year.

KNPC Maintaining Financial Stability in a Rough Market

According to information given to the Kuwait News Agency (KUNA), last year saw an increase in petroleum sales as well as higher profits in the industry overall. It is speculated that this previous boost might have contributed to KNPC being able to still post a profit, despite sharp recent declines in the demand and sales of Kuwait's crude oil. Right now, the total production of crude oil in Kuwait is still at about 2.7 million barrels per day. The continued success of Kuwait's oil industry comes alongside positive news from Director General of Kuwait’s Public Institute for Social Security (PIFSS), Fahad Al-Rajaan.

Persian Gulf Oil Companies under Pressure

In March, Moody's Investors Service conducted research that concluded that the Persian Gulf oil companies may still be recovering from the decline in oil prices that began three years ago. When compared to the situation that those organizations are in, it seems that the KNPC is in a good position and could possibly post an even higher profit next year. We can expect the leadership at KNPC to continue making the necessary adjustments to ensure that the company is able to operate as usual and still remain lucrative despite ever-changing and fluctuating values and demand levels.

The Middle East Expects Growth in Demand for Crude Oil

Despite reduced international demand for Kuwait's crude oil, local demand in the country has actually risen by about 25,000 barrels per day, and the entire Middle Eastern region is expected to see an increase of about 11,000 barrels per day within the next couple of months. The increase in demand should send profits even higher for the KNPC and other OPEC members. As global energy needs increase and alternative forms of energy continue to become more popular, many countries in the Middle East are striving to profit from their nations' leading natural resource as much as possible, even in turbulent markets.

Kuwait Continues Stable Economic Recovery

Although the past few years have been unconventional for the Kuwait oil business, the major players have managed to adapt to the demand and OPEC is staying on top of regulations to ensure that their members get a fair price for crude oil regardless of foreign production volume and other factors.