Kuwait should open refining to private capital, says former KPI executive

what happened

Former Kuwait Petroleum International chief Kamil Al-Harami, according to Reuters, argues that the government should end the state's monopoly over the hydrocarbon sector and allow private money into refining. He says this would put the sector's surplus funds to work and build up more profitable activities in refining and petrochemicals.

Al-Harami notes that refined products are selling near record levels, with some exceeding the price of crude by at least $40, and petrol and naphtha reaching $170 a barrel while crude has topped $100. He opposes raising Kuwait's crude output capacity above three million barrels per day and favours focusing on downstream expansion.

According to OAPEC, Kuwait's refining capacity stands at about 1.45 million barrels per day, roughly 13% of total Arab refining output. The government plans a $10 billion petrochemical complex next to the Al-Zour refinery, and Ali Al-Anzi of the Al-Manakh economic centre suggests it could be built as a public-private venture.

why it matters

For markets this is an expert's opinion rather than a policy decision, and no official steps have been announced yet. Still, a shift toward refining instead of raw export growth matters for crude demand balances and refining margins in the region.

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