KUWAIT: Kuwaiti oil experts attributed the 10 percent increase in oil prices last week as a result of the OPEC+ decision to lower production by two million barrels per day, starting next November, the biggest decrease in production since 2020.In separate statements to Kuwait News Agency (KUNA), economists added that such an increase is also supported by the big and sudden decrease in American crude commercial oil reserves and the decline of strategic reserves, as it reached its lowest levels since July 1984.

Petroleum engineering assistant professor in The Public Authority for Applied Education and Training, Dr Ahmad Al-Kouh, stated that many factors contributed to the price hike most notably the Russia-Ukraine crisis and the renewed demand since the waning of the coronavirus pandemic. Al-Kouh added that there are expectations of an upcoming global economic recession, indicating that inflation in the global economy is affecting the oil industry and consumption.

Furthermore, he commented saying oil price of $70 is fair for all including producers, consumers, and investors. There are two types of consumers, Al-Kouh explained, the first consume oil for the purpose of heating, while the second use it for industry and transport.

Deputy Chief of the Kuwait Business Council in Dubai, Feras Al-Salem, also attributed the rise in oil prices to OPEC's decision to lower production, which comes as an attempt to safeguard market balance and avoid surplus. Al-Salem mentioned that advancements in the cargo sector in East Asia increased the demand for oil as fuel for tankers. He forecasted that oil prices will exceed $100 due to a standstill in supply, especially as European Union has not yet reached an agreement to compensate for Russian oil and gas.

Al-Salem noted that gas prices increased 80 percent since the beginning of the year, compared to the 11 percent increase in oil prices. He said that, "Gulf exports to Asia will not be affected but will get worse due to the expected sanctions on Russia", creating an international crisis in energy prices, while inflation levels will reach new records. In a similar statement, energy expert Jamal Al-Gharabally said to KUNA that the Opec + alliance proved its firm and strong position after the decision to reduce production starting next November amid expectation of a lowered demand for oil because of the global economic recession.

Al-Gharabally explained the political and economic sides of the OPEC + decision to reduce production, especially after the visit of the US President Joe Biden to Saudi Arabia, during which he demanded an increase in oil production. The expectation is that oil prices will achieve some gains during the last quarter of this year and beginning next year, reaching $110 pb, in case the war between Russia and Ukraine continues, and with the resultant economic, political and trade decisions and sanctions. On Wednesday, the OPEC plus alliance agreed to reduce oil production to two million barrels per day, to support prices that witnessed lately its first quarterly loss in two years.