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Kuwait Posts $7.5 bln Deficit

Kuwait Posts $7.5 bln Deficit

Thursday, 20 February, 2020 - 06:45
Sunset view of the arch pylon on the Sheikh Jaber al-Ahmad Al-Sabah Causeway which will lead to the Future Silk City, in Kuwait Bay, Kuwait April 23, 2019. REUTERS/Stephanie McGehee
Kuwait - Asharq Al-Awsat

Kuwait posted a deficit of 2.3 billion Kuwaiti dinars ($7.52 billion) in the period from April 1 to the end of January, after depositing 10 percent of revenue to its sovereign wealth fund, official data showed.


Kuwait previously said it expected a total deficit of 7.7 billion dinars in the 2019-2020 fiscal year, which ends in March.


The Finance Ministry said the data published on Wednesday was incomplete because of delays in the disclosure of spending by several government agencies. 


Meanwhile, trade sources said that Aramco Trading Co (ATC) has sealed a new deal to secure long-term crude oil supplies from state-run Kuwait Petroleum Corp (KPC) that can be processed at refineries owned by Saudi Aramco in Asia.


ATC inked its first contract to buy Kuwaiti Export Crude (KEC) from KPC this year, three sources with knowledge of the matter said. The company is the trading arm of Saudi Aramco, the state-owned oil company of Saudi Arabia, which is the world's largest oil exporter.


One of the sources told Reuters that ATC will nominate a volume each month.


Saudi Aramco and KPC declined to comment.


The Kuwaiti crude supply contract is in addition to two other annual deals ATC sealed late last year to buy naphtha from Italy and Greece in 2020.


The deals allow ATC to widen its supply sources globally beyond Saudi Arabia to secure feedstock for Saudi Aramco's expanding refining and petrochemical base in Asia after a drone attack in September crippled its oil production facilities and forced domestic refineries to cut output, the sources said.


The contracts also boost the volume of oil that ATC trades and allows it to have direct control over where it can divert excess naphtha to when prices are favorable, the sources said.


Saudi Arabia's naphtha exports in 2019 fell 14.6 percent from a year earlier to 5.8 million tons, JODI data showed. The company said on its website that it can export up to 10 million tons of naphtha a year.


Saudi Aramco holds shares in refining and petrochemical projects at two sites in China, one in Japan, one in Malaysia, and owns a majority stake in South Korean refiner S-Oil Corp, according to the company's website.


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