London — Major OPEC producer Kuwait will see a change in leadership at the top of its ruling family after the death of its 91-year-old emir, Sheikh Sabah Al-Ahmad Al-Sabah.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
His passing, announced on Sept. 29 by the state-run Kuwait News Agency, is expected to see leadership handed to his heir and half-brother, Sheikh Nawaf al-Ahmed al-Sabah. Kuwait's ruler appoints members to the Supreme Petroleum Council, which governs oil policy.
A founding OPEC member, Kuwait remains a significant global-scale producer and one of the most compliant participants in the group's market management strategy with Russia. The sheikhdom produced 2.29 million b/d of mostly heavy and medium sour crude in August, according to the latest S&P Global Platts survey.
In a statement on the OPEC website, Secretary General Mohammed Barkindo said the late emir was "a strong defender of OPEC" and highlighted the role he played in facilitating the Declaration of Cooperation in 2016, which underpins the producer group's current market management strategy.
Most of the country's oil -- traded as Kuwait Export Crude -- is destined for customers in China, Japan, South Korea and India.
In one of his last major diplomatic achievements as ruler, Sheikh Sabah agreed to the restart of the so-called Neutral Zone with Saudi Arabia, a shared region with capacity to produce 500,000 b/d of crude.
Before the COVID-19 pandemic hit world markets, production in Kuwait reached a record 3.15 million b/d in April, boosted by the return of output from the Neutral Zone and increased volumes from its northern heavy oil fields, according to the Platts OPEC survey.
The likely successor Nawaf, 83, has served as the crown prince and also deputy commander of the military of the small Gulf state. Nominated as crown prince on Feb. 7, 2006, his ascent contravened a long-standing tradition in Kuwait, which typically saw the offices of emir and crown prince alternate between the Al-Jaber and Al-Salem branches of the family.
Low oil prices have hit Kuwait hard and led to growing calls for the tiny Gulf state to diversify its economy and become less oil dependent. In March, S&P Global Ratings downgraded Kuwait's long-term sovereign credit to AA- from AA with a stable outlook due to a sharp drop in oil prices and the country's slow reform momentum, which has seen it fail to meaningfully reduce its dependence on crude revenues and implement a value-added tax.
Oil Markets podcast
Our podcast that provides analysis of key oil price movements across the globe.Listen