Oil price in Kuwait experiences a significant decrease, falling by $6.98 to reach $69.34 per barrel.
In a stunning turn of events, the cost of Kuwaiti oil plunged by a whopping $6.98 on Tuesday, settling at $69.34 per barrel. This steep drop came after a previous set price of $76.32 the day before, as reported by the Kuwait Petroleum Corporation. This downturn wasn't confined to Kuwait, as global oil markets also faced significant losses.
Brent crude futures and U.S. West Texas Intermediate (WTI) crude both slid, with Brent crude losing $4.34 and closing at $67.14 per barrel, and WTI crude falling $4.14, ending the day at $64.37 per barrel, as detailed by Al-Rai daily.
This decline in oil prices comes amid an array of factors lurking in the shadows. Let's dive into some of the key factors that have contributed to this oil market rollercoaster.
First and foremost, there's the matter of OPEC+ raking up oil production significantly. The group, anxious to flood the market, agreed to boost output by about 411,000 barrels per day. This hefty increase has added to a global supply gain of roughly 1.6 million barrels per day in 2025, with potential for more sizable increases in the near future. Some members, such as Kazakhstan, have even exceeded their production ceilings, making matters worse as the market struggles to cope with this oversupply.
Another crucial factor is the stagnation in global oil demand. Demand has reached its lowest level since the early 2000s, with growth barely reaching 650,000 barrels per day. A significant cause of this weakening demand is the global economic slump and, in particular, weak oil consumption in China, one of the world's largest oil consumers.
Furthermore, the ongoing geopolitical and trade uncertainties have intensified, casting a long shadow over market confidence. These lingering uncertainties have raised the specter of additional price drops in the near future.
In the midst of all this turmoil, oil-producing countries are grappling with budget constraints as they seek to balance their books. The drop in prices below $60 per barrel for certain benchmarks, such as West Texas Intermediate (WTI), has sent oil producers into "maintenance mode," resulting in reduced capital expenditures and missed opportunities for expansion.
Finally, for Gulf States like Kuwait, the budget breakeven oil price—the level at which revenues meet expenditures—has risen in recent years and now lies above the current Brent crude price. Although Kuwait's fiscal situation benefits somewhat from its sovereign wealth fund, the regional budget balance is expected to head into deficit territory, underscoring the economic fragility tied to oil market conditions.
All in all, the precipitous fall in Kuwaiti and global oil prices can be attributed to OPEC+ production increases leading to oversupply, a slowdown in oil demand growth due to global economic weakness and weak Chinese consumption, growing geopolitical and trade uncertainties, and the financial burden placed on oil-producing countries as they struggle to keep pace with diminished revenues.
The drop in oil prices, as seen in the case of Kuwait and reported global markets, can be partially attributed to increased oil production by OPEC+, which has led to a global supply gain and an oversupply in the market. Concurrently, the stagnation in global oil demand, which has reached its lowest level since the early 2000s, is another key factor contributing to this downturn in the energy sector. These circumstances have put financial strain on oil-producing countries, such as Kuwait, where the budget breakeven oil price has risen above the current Brent crude price, potentially leading to deficits in regional budgets.
