By Majd Othman
KUWAIT: In the last few months, the region has witnessed a progressive step through the Saudi-Iranian reconciliation. This will surely lead the region into a new era of bilateral relations, particularly in economic and trade relations among the GCC countries. While Kuwait is considered one of the key pillars of the economy in the GCC, the effect of this reconciliation is expected to be quite promising. The Kuwait Times spoke with business experts and discussed with them the possible positive impact on Kuwait’s economy following the reconciliation and what their expectations are for the country.
Consultant and oil expert Abdulsamee Bahbahani said that in view of the major transformation that is taking place in Saudi Arabia, the kingdom is keen on establishing more business relations with other countries in the region. It does not seek to limit its relations to geopolitical factors, as the country is witnessing a qualitative leap in economic development and has directed its investments so as to create big and profitable projects. “This trend was greatly reflected in the oil sector.
These positive changes in Saudi Arabia have reflected on OPEC with a significant impact since Prince Mohammad bin Salman led the OPEC conference ten years ago,” he noted. Regarding the reconciliation, the oil expert said that there are almost four main oil fields shared between Saudi Arabia and Iran, and Kuwait is also a part of some of the oil fields. These are some of the most important benefits that Kuwait gets from the reconciliation since these oil fields were vulnerable to destruction. “If there were no economic agreements based on the union of production, there is no doubt that this is vulnerable,” he said.
The expert pointed out that Iranian oil production has recently reached 3.5 million barrels per day as a result of the economic union realized with other countries. The country is on track to produce 4 million barrels per day by the end of 2024, despite the international sanctions. He said the reconciliation will be to the advantage of all countries in the region, including Kuwait. He said Saudi Arabia will soon join the BRICS bloc, which represents a combined global GDP of 22 percent and will become a major competitor of the G7.
According to him, the reconciliation presents a great opportunity for Kuwait to increase its economic investments and participate in oil export operations with Iran. He expected that there will be a regional alliance in petrochemical export operations, especially since Iran is the second country in the world in terms of gas reserves, in addition to the early existence of shared Saudi-Iranian oil and petrochemical projects, which will develop into great success. Economic expert Mohammad Ramadan stressed that Kuwait is one of the major beneficiaries of the reconciliation as it enjoys good relations with Saudi Arabia and Iran.
He said that this reconciliation will positively impact Kuwait. He pointed out that with the existence of major Chinese projects like the Silk Road, Kuwait has lost several economic opportunities prior to the reconciliation, especially since Kuwait has a good relationship with both Saudi Arabia and Iran. Although there is a great opportunity for Kuwait to benefit from the reconciliation, the country has not taken action towards it.
“Despite the current political stability in the region, Kuwait considers that economic development is not one of its priorities and does not attach importance to it. We lack economic development plans, and as such, we will not achieve development unless there is a real desire from the authorities,” he concluded.
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