Recent visits by the U.S. President have resulted in $4 trillion worth of investments in the U.S. over the next three years from three Arab Gulf countries: Saudi Arabia, Qatar, and the UAE. These investments are expected to yield productive outcomes that could strengthen security and stability in the region. There are also strong indications that a new deal between the U.S. and Iran is imminent, which could help stabilize oil prices.

While huge sums of money are being spent, there is hope that oil prices will recover in the coming years. Many Arab Gulf states are currently facing huge deficits due to low oil prices, which are insufficient to cover even 40 percent of their state budgets and expenditures. The visit itself serves as a strong indication of a new and emerging alliance between the USA and the Gulf States, in terms of the security and safety of all Gulf nations. This is aimed at ensuring they work together for defense in the event of an emergency. Meanwhile, the Gulf states continue to use all available means to secure their safety while simultaneously investing in the U.S. through arms purchases and financial investments. From this perspective, Kuwait is emerging as a leading global investor, as it is channeling its surplus funds into overseas investments, primarily in the U.S. and European countries. This investment strategy is expected to extend further into Far Eastern markets, including Japan, and eventually China, amounting to $40 billion. This shift is becoming a huge development, offering potential for growth in Kuwait’s oil industry, as well as in refining and petrochemicals.

The Kuwait Petroleum Corporation (KPC) should seriously consider these opportunities. The President’s visit to our region is a clear indication of the commitment to the stability of the region. However, one element that was overlooked is the future stability of oil prices, especially among the top producers. It appears the issue was intentionally left untouched, allowing the oil markets to make their own predictions and remain separate from politics. Undoubtedly, the visit was a highly successful one, with a $4 trillion deal, marking the largest ever weapons purchase in a single state visit.

By Kamel Al-Harami Independent Oil Analyst

Specialist John McNierney, (left), and trader Anthony Carannante work on the floor of the New York Stock Exchange on May 14. (AP)

WASHINGTON, May 17, (AP): Moody’s Ratings stripped the U.S. government of its top credit rating Friday, citing successive governments’ failure to stop a rising tide of debt. Moody’s lowered the rating from a gold-standard Aaa to Aa1 but said the United States “retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the US dollar as global reserve currency.”

Moody’s is the last of the three major rating agencies to lower the federal government’s credit. Standard & Poor’s downgraded federal debt in 2011 and Fitch Ratings followed in 2023. In a statement, Moody’s said: “We expect federal deficits to widen, reaching nearly 9% of (the U.S. economy) by 2035, up from 6.4% in 2024, driven mainly by increased interest payments on debt, rising entitlement spending, and relatively low revenue generation.”

Extending President Donald Trump’s 2017 tax cuts, a priority of the Republican-controlled Congress, Moody’s said, would add $4 trillion over the next decade to the federal primary deficit (which does not include interest payments). A gridlocked political system has been unable to tackle America’s huge deficits. Republicans reject tax increases, and Democrats are reluctant to cut spending.

On Friday, House Republicans failed to push a big package of tax breaks and spending cuts through the Budget Committee. A small group of hard-right Republican lawmakers, insisting on steeper cuts to Medicaid and President Joe Biden’s green energy tax breaks, joined all Democrats in opposing it.

Kuwait to generate 5,700 MW of renewable energy with new projects, valued at 1 billion dinars.

KUWAIT CITY, May 15: Acting Chief Executive Officer (CEO) of Kuwait Oil Tankers Company (KOTC) Sheikh Khaled Al-Sabah has announced that Kuwait is now producing 16 million gas cylinders annually using solar energy through the Umm Al-Aish and Shuaiba plants, which have a combined production capacity of seven megawatts without using electricity from the national power grid. This is considered a significant move towards using solar energy to generate electricity in order to reduce reliance on electricity loads. Speaking at the inauguration ceremony for the conversion of production in both plants to solar power, Sheikh Khaled Al-Sabah affirmed that this step is in line with the strategic plan of the country to reduce carbon emissions and achieve carbon neutrality by 2050. He described the project as a vital part of the ongoing effort to reduce reliance on conventional energy and limit environmental impact.

He also highlighted the aspiration of the company to expand its oil tanker fleet, which currently includes 31 vessels. He revealed a comprehensive strategy is being developed and will be announced soon, reaffirming that KOTC continues to meet all marketing demands and remains a key player in the energy logistics of the country. He added the shipping operations of KOTCH remain stable, even amid global trade tensions, thanks to strategic planning for crisis scenarios. He confirmed that the current trade war has not affected the markets of Kuwait Petroleum Corporation (KPC). “Our distribution and marketing operations are built on long-term, strategic relationships,” he asserted; while stressing the commitment of the country to fulfill all international contracts. He added Kuwait maintains a strong overseas presence with seven million barrels of oil stored in Asia — three million in Japan and four million in South Korea. He disclosed that KPC has a comprehensive strategic plan to study markets and market needs, determine development capacity and increase vessels based on market data.

Asked about the merger of the two gas plants into the Kuwait National Petroleum Company (KNPC), he confirmed that the integration of the Umm Al-Aish and Shuaiba gas plants into KNPC is moving forward as per an ambitious plan. He said KNPC currently provides gas to KOTC tankers, highlighting the synergy between national entities. On the other hand, Director of the Projects and Maritime Agency Group at KOTC Yousef Al-Khamis stated that the solar energy conversion project cost around KD1.9 million; indicating this investment is expected to save about 16,000 barrels of oil annually and generate 11,000 megawatts of clean energy; thereby, easing pressure on the national electrical grid. Al-Khamis also unveiled the plan to establish a third gas cylinder factory in Kabad, while the two existing plants can meet domestic demand until 2030. He said the expansion is part of the company’s long-term strategy. He also addressed concerns about misuse of household gas cylinders by restaurants. “We are coordinating with the Cooperative Societies Union and the Ministry of Commerce to implement mechanisms that prevent restaurants from using cylinders designated for residential use, instead of commercial cylinders,” he added.

By Najeh Bilal
Al-Seyassah/Arab Times Staff