Kuwait to dissolve parliament, complicating plans for capacity expansion

Kuwait plans to dissolve its parliament over the coming months and have fresh elections, its Crown Prince said in a televised address to the nation June 22, further complicating the OPEC producer's plans to raise production capacity.

"It is in the national interest I seek dissolution of the National Assembly and I urge the Kuwaiti people to elect a new house that can bear great [responsibility] of maintaining state stability," Sheikh Mishal al-Ahmad al-Sabah said in a statement carried by state news agency KUNA.

The state will declare a royal decree dissolving the parliament over the coming months, he said.

The development followed the resignation of the Kuwaiti cabinet on April 5, after the country's prime minister stepped down.

Fractious electoral politics are not new in Kuwait, which has democratically elected representatives compared to other Gulf producers in the region.

However, the contentious nature of Kuwaiti politics and the parliament's long-standing aversion to foreign investment has often complicated efforts to drive in funding, particularly into its critical energy sector.

Kuwait pumped 2.69 million b/d in May, according to a monthly survey by S&P Global Commodity Insights. However, it will struggle to meet future output increases suggested by the OPEC+ alliance if it fails to greenlight additional capacity increases.

The group, chaired by Saudi Arabia and Russia, has raised its quota increases for July and August to 643,000 b/d -- from the typical 432,000 b/d rises -- in anticipation of higher global oil demand.

Kuwait's current plan is to raise its production capacity to 4.75 million b/d by 2040 from 3.15 million b/d at present.

Historically, its oil sector has been plagued by the political instability and frequent turnover at the oil ministry and state-owned oil companies. That has led to delays in projects, including in reinvigorating its giant, aging Burgan field, whose capacity continues to decline.

In January, OPEC named Kuwaiti oil executive Haitham al-Ghais as its new secretary general to replace Mohammed Barkindo who steps down in July.