Kuwait oil production costs up more than 1,200% since 2000

Kuwait’s oil production costs have increased by nearly 12 times since 2000, but remain among the lowest in the world.

The soaring costs are eating into the Gulf emirate’s net revenues, which dipped by more than KD3 billion ($10 billion) between 2022 and 2025.

AlShall Consulting, a Kuwaiti think tank, found that from around $9.80 a barrel in the fiscal year 2021-2022, production costs in the Opec founding member swelled to around $14.60 during the 2025-2026 fiscal year, which started on April 1.

Crude production costs were only around $1.20 a barrel in 2000 and this means they have surged by nearly 12.2 times until now, the report said, citing oil ministry data.

“The increase in the country’s production costs means a loss of around KD3 billion during five consecutive fiscal years… This may surpass the revenues from government fees and taxes,” it added.

Higher production costs last month meant that Kuwait’s net revenues were based on a price of $47 a barrel against an average market price of about $61 a barrel, it said.

“While the market oil price remains out of the country’s control, production costs must be completely managed by authorities responsible for production,” it added.

Kuwait’s oil ministry said in a report in 2024 that crude and gas production costs have risen by nearly 10 percent over the past year, mainly as a result of ageing fields, underinvestment, technical challenges and other factors.

The increase coincides with Kuwait’s plans to boost oil output capacity to nearly four million barrels per day by 2035 and more than double gas production.

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Lower oil prices and higher costs over the past few years have widened Kuwait’s budget deficits, forcing the government to revive plans to borrow from the local and foreign markets. Since new laws were introduced in March, Kuwait has borrowed more than $6 billion from local banks and $11 billion from abroad.

Oil production costs in the Gulf countries have remained among the world’s lowest due to their vast, easily accessible, high-quality light sweet crude, economies of scale from massive fields, government ownership and reliance on low-cost labor.

Kuwait’s recoverable oil deposits are officially estimated at around 101 billion barrels, the world’s seventh-largest deposits.