Strong oil prices along with high output will boost Kuwait's hydrocarbon export earnings to a record high of more than USD 114 billion in 2012 and the increase will widen its current account and fiscal surplus.

The International Monetary Fund said that Kuwait earned a record high of USD 98.7 billion from its oil sales in 2011 after crude prices climbed to all time high of more than USD 105 per barrel and the emirate pumped at one of its highest levels of nearly 2.6 million barrel per day of oil.

The 2011 income was more than 50% above the Gulf emirate's 2010 oil revenue of about USD 61.8 billion as crude prices were just above USD 70 a barrel. Oil prices are projected to average above USD 100 this year and high crude supply could allow Kuwait to net its highest income from oil exports of around USD 114.4 billion in 2012.

Earnings are projected to slip in 2013 but will remain as high as USD 105.4 billion as the IMF expects crude prices and the emirate's production to remain high.

Higher oil exports will allow Kuwait, a key OPEC member, to record its highest current account surplus of around USD 88.4 billion in 2012 compared with the record surplus of nearly USD 70.8 billion in 2011. The surplus is projected to fall back to around USD 76.2 billion in 2013 but remains one of the highest account balances recorded by the Gulf country.

The surge in the income could also allow Kuwait, which controls nearly 7% of the world's proven oil deposits, to record its highest fiscal surplus of around KWD 19.9 billion in the 2012 to 2013 fiscal year.

Kuwait had forecast a deficit of KWD 4.4 billion for its 2012 to 2013 budget but it assumed a conservative oil price of around USD 60 more than 50% below the expected actual price.

The IMF report showed budgeted revenue of KWD 13.6 billion could nearly triple to about KWD 36.8 billion in 2012 to 2013 while actual expenditure could be cut to around KWD 20 billion from a budgeted KWD 22.1 billion.

Source - Emirates Business 24/7

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