FILE PHOTO: A 3D-printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic
DUBAI: Kuwait’s state energy company says customers are reluctant to increase oil imports next year, signalling that the market is being suppressed by global economic weakness.
“We’re really nervous about where demand is going over the next few months and next year, especially if there is a recession,” Sheikh Nawaf Al-Sabah, chief executive officer of Kuwait Petroleum Corp, told Bloomberg TV.
“We’re talking to our customers. They’re saying that they either require the same amount of oil, or they’re asking for slightly less next year.”
The Organisation of the Petroleum Exporting Countries (Opec) member exports about two million barrels of crude oil a day, most of it to Asian countries such as China, South Korea, Japan and India.
Opec, including its de facto leader Saudi Arabia, has said that oil consumption is being affected by slowdowns in the United States, the eurozone and China, among other regions.
The group and its allies, known as Opec+, decided to cut production during a meeting in early October. That angered the United States, which wants lower oil prices.
Despite the weak outlook for demand, many traders and analysts expect it to hold output steady. That’s partly because members may want to assess the impact of a Group of Seven price cap on Russian crude exports that began yesterday.
Kuwait has invested 10s of billions of dollars in upgrading and building new refineries in recent years. That will enable it to boost exports of diesel and jet fuel to Europe in 2023, Sheikh Nawaf said.
Those shipments will go a small way towards replacing flows of refined oil from Russia, which the European Union is set to ban in February as part of measures to punish Moscow for its invasion of Ukraine. — Bloomberg
