S&P Global Affirms Kuwait’s Rating at ‘A+’ with Stable Outlook

A view of Kuwait City. (Reuters file)
A view of Kuwait City. (Reuters file)
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S&P Global Affirms Kuwait’s Rating at ‘A+’ with Stable Outlook

A view of Kuwait City. (Reuters file)
A view of Kuwait City. (Reuters file)

S&P Global affirmed on Tuesday Kuwait’s long-term credit rating at “A+” with a stable outlook, forecasting the country’s economy to grow 2% in 2025-2026.

In its latest report, the US-based agency said that due low oil prices and large expenditure, Kuwait is forecast to run a high fiscal deficit in the upcoming two to three years.

“Amid less favorable economic conditions due to global trade tensions and weaker oil prices, Kuwait’s large stock of external public-sector assets should provide a buffer for a policy maneuver, if needed,” said S&P Global.

The report further noted that Kuwait’s fiscal deficits will remain elevated, averaging around 8.9% of gross domestic product from 2025 to 2028, compared to 2% in 2024.

“Kuwait's fiscal deficits will remain elevated as subdued oil prices and high expenditure levels, particularly on wages and subsidies, continue to weigh on public finances,” S&P said.

It also assumed Brent oil prices of $65 per barrel in 2025 and $70 per barrel beyond then.

The agency said fiscal deficits are forecast at 6% of GDP on average by 2028 from around 14% in 2025 due to a modest increase in production during 2027-2028 and government efforts to increase non-oil revenues.

“S&P Global is recognizing that Kuwait is undergoing technical preparatory work for several fiscal reforms, including corporate income tax, production tax, subsidies rationalization, and improved government procurement,” it noted, adding that the government is seeking to increase non-oil revenues through raising taxes and improving revenue collection through digital transformation.

The agency stressed that one key development is the recent passage of the Financing and Liquidity Law, which enables the government to tap capital markets for the first time since 2017.

“Our base case assumes that government capital expenditure and part of the fiscal deficit will be partially funded via debt issuance. We forecast issuance of about $10 billion in 2025 and about $5 billion of debt annually in 2026-2028,” the agency added.

Meanwhile, S&P warned that potential indirect effects of low oil prices and global policy uncertainty could dampen growth in Kuwait.

It said the US administration imposed a 10% tariff on Kuwaiti exports to the US, but imports of oil, gas, and refined products, which constitute the majority of Kuwait's exports, were exempt from the new measures.

The agency stated that it expects Kuwait’s economy to grow 2% in 2025-2026, compared to a 2.7% forecast, while rebounding to 2.6% in 2027-2028 as oil output rises.



Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)
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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)

Saudi Arabia has long followed a clear and transparent approach to preserving stability in global energy markets. Historically, it has consistently adhered to all decisions issued by the OPEC+ alliance and played a leading role alongside other producers to ensure compliance and promote the collective good.

Recently, the Kingdom briefly increased production volumes. However, the additional output was neither marketed domestically nor exported abroad. Instead, it was directed as a precautionary measure to strengthen strategic reserves, improve supply flows between the country’s eastern and western regions, and rebalance stocks held in overseas storage facilities.

Asharq Al-Awsat reached out to energy specialists to understand the significance of this move for energy security. Experts explained that building strategic reserves allows Saudi Arabia to respond swiftly to customer needs in the event of political crises, regional wars, adverse weather, or other unforeseen disruptions.

Fouad Al-Zayer, former head of data services at OPEC and an energy expert, said the Kingdom maintains millions of barrels in storage both inside and outside its borders. These reserves serve as a buffer during emergencies, enabling the country to compensate for supply shortfalls within a short timeframe. He emphasized that this stored crude is strategically critical in the face of geopolitical tensions and conflicts.

According to Al-Zayer, Saudi Arabia relies on an extraordinary reserve capacity unmatched by any other producer. The country currently produces more than 9 million barrels per day, with the capability to pump even higher volumes if needed. He noted that Saudi reserves alone account for 3 million barrels per day out of roughly 5 million barrels in global spare capacity, underscoring Riyadh’s central role in stabilizing markets and upholding its commitments under OPEC+ agreements.

He added that Saudi Arabia also hosts the International Energy Forum, which works to improve data quality and transparency in the sector. In June, the Kingdom’s output reached about 9 million barrels per day, with the modest increase attributed to logistical considerations. Al-Zayer stressed that it is common for producers to temporarily boost production to support maintenance operations or replenish storage, without impacting the broader market, since these barrels are not immediately traded.

He reiterated that Saudi Arabia has always honored OPEC+ production targets and has played a pivotal role in encouraging other members to meet their quotas.

Meanwhile, Dr. Mohammed Al-Sabban, former senior adviser to the Saudi Minister of Petroleum, explained that the Kingdom has consistently proven itself a reliable and secure supplier to global energy markets. He noted that Saudi Arabia’s recent statement clarified the reasons behind the June production uptick, emphasizing that the additional oil was neither destined for local consumption nor for export but was solely intended to refill domestic and foreign storage. He said such measures do not represent any breach of commitments, unlike the practices of some other countries.

Al-Sabban pointed out that Saudi Arabia has often gone beyond required cuts to help stabilize markets. Even the recent production increases, he said, fall within the scope of voluntary adjustments agreed upon by OPEC+ members. He noted that in July, Saudi Arabia raised production in line with credible studies indicating the market could absorb these volumes without disruption.