WITH the upcoming meeting of OPEC+ next month in Vienna, oil markets are anxious about the group’s potential decision to raise production again. This has raised concerns about a further weakening of oil prices, which no one desires, but it is a sign that OPEC+ is worried about the lack of discipline among some of its members.

Nonadherence to agreed production limits is becoming a regular phenomenon. Currently, oil prices hover around $64 a barrel, significantly lower than the $70–$80 range needed to balance many OPEC members’ annual budgets. This has forced several member countries to seek loans from international banks to cover budget deficits. Most oil-producing countries require prices between $90 and over $100 per barrel in the coming years, unless they manage to suppress annual consumption, which is highly unlikely. Reducing electricity consumption must be carefully planned, especially given the current low electricity prices in Kuwait, where consumers pay only 2 fils per kilowatt-hour, while the government’s cost exceeds 10 fils.

This makes electricity one of the cheapest in the region. Despite calls to escalate prices based on individual consumption, which means the more you use, the higher your fair bill the demand remains high. During the summer months, it is necessary to increase oil production to meet electricity needs due to the lack of alternatives to oil. Otherwise, Kuwait would have to import gas, which is more expensive financially but cleaner, requires less maintenance, and is more environmentally friendly.

Until Kuwait discovers large gas reserves, which are still under exploration and have yet to be confirmed, oil will remain the primary energy source. Since the call by the U.S. president to reduce oil prices, this trend has continued, with OPEC+ increasing crude oil production to maintain its market share and prevent other producers from encroaching on it.

The solution for oil-producing countries is to find alternatives to oil, switch to other energy sources, and adapt to discoveries. We can borrow funds and collaborate with neighboring countries on joint energy projects. It is time to seriously consider options and explore alternatives. Oil will remain with us, but investing in cleaner, sustainable energy sources is the right move to stay ahead. We possess the financial resources and borrowing capacity to think proactively, invite international firms to partner with us, and help promote alternatives to oil.

Solar energy, for example, could be a promising alternative. We are a young nation with a youthful population and abundant financial resources, which can be invested in seeking and developing alternatives to oil. Relying solely on oil for income is no longer a sustainable strategy. We have the means and access to international expertise to explore these alternatives. Thinking ahead and planning for the future is neither a bad thing nor taboo, but it is a responsibility we owe to the next generation. We must build a new future with alternatives that have been serving us since 1946.

By Kamel Al-Harami

Independent Oil Analyst
 Email: naftikuwaiti@yahoo. com

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between US dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea on May 22. (AP)

TOKYO, May 22, (AP): Asian shares fell Thursday after Wall Street slumped under pressure from the Treasury bond market and worries about surging US debt. U.S. futures were little changed, while Japan’s benchmark Nikkei 225 shed 1.0% in afternoon trading to 36,944.55. Hong Kong’s Hang Seng lost 0.9% to 23,615.21, while the Shanghai Composite edged down 0.1% to 3,383.10.

Australia’s S&P/ASX 200 slipped 0.5% to 8,342.80. South Korea’s Kospi dropped 1.1% to 2,595.69. Rising yields for US Treasury bonds are a canary in the coal mine, Stephen Innes of SPI Asset Management said in a commentary. “The USstill has the biggest markets, the deepest liquidity, and the dollar’s inertia working in its favor.

But even inertia can’t outrun compound interest and structural deficits forever,” he wrote. The declining US dollar also weighed on regional markets, according to some analysts, because some Asian nations have significant holdings in dollars. A weak dollar also hurts Asian exporters, such as Japanese automakers and electronics companies, by reducing the value of their overseas earnings when they are converted into yen.

In currency trading, the US dollar fell to 143.27 Japanese yen from 143.68 yen. It had been trading at 150 yen levels a year ago. The euro cost $1.1335, up from $1.1330. Investors remain worried over President Donald Trump’s actions, including tariff policies that directly affect Asian companies and decisions on major legislation such as a funding bill now in Congress. “US equities slumped in a ‘Sell America’ move as things turned ugly on Trump’s ‘big, beautiful tax bill.’ ” said Tan Jing Yi, analyst at Mizuho Bank in Singapore.

On Wednesday, shares tumbled on Wall Street after the US government released the results for its latest auction of 20-year bonds. The government regularly sells such bonds, which is how it borrows money to pay its bills. In this auction, the US government had to pay a yield as high as 5.047% to attract enough buyers to lend it a total of $16 billion over 20 years.  

Gold prices climb for the third consecutive session amid a softer dollar and geopolitical tensions.

NEW YORK, May 22: Gold prices rose for a third straight session on Wednesday, reaching a one-week high, supported by a weakening US dollar and growing safe-haven demand amid ongoing economic and geopolitical uncertainty.

As of 1:55 p.m. ET (5:55 p.m. GMT), spot gold gained 0.7% to trade at $3,312.77 per ounce, while US gold futures closed 0.9% higher at $3,313.50.

The US dollar index (.DXY) fell 0.6% against a basket of major currencies, making gold more affordable for holders of foreign currencies and bolstering demand.

Meanwhile, Wall Street’s major indexes dipped, and government bond yields rose as investors monitored the ongoing debate over former US President Donald Trump’s tax-cut bill, which has fueled concerns about the nation’s mounting debt.

“We are kind of paused here in mid-range between the high and recent low, waiting for a signal of more trade and tariff deals,” said Daniel Pavilonis, senior market strategist at RJO Futures.

Despite a temporary easing in US-China trade tensions, the economic outlook for the U.S. remains weak, according to a Reuters poll of economists.

In geopolitical developments, CNN reported on Tuesday that new intelligence suggests Israel is preparing to strike Iranian nuclear facilities. This comes even as the US administration continues discussions with Iran over its uranium enrichment program.

Gold is widely regarded as a safe-haven asset during times of economic or geopolitical instability. Bullion prices reached a record high of $3,500.05 last month.

“We expect gold’s recent price dip will stimulate investment buying, as macroeconomic and geopolitical uncertainty linger,” analysts at ANZ said in a note.

Silver also posted gains, rising 0.8% to $33.32 per ounce.