Kuwaiti oil prices dropped as low as US$7.2 per barrel on Friday as investors rushed to sell stocks and bonds as global oil prices plunged.
The Saudi-led Gulf Cooperation Council (GCC) and Kuwaiti companies said on Friday that foreign direct investments hit Kuwait’s economy in 2016, hitting a record low of $US6.5 billion.
Kuwaiti oil sales fell by as much as 30 per cent from last year, according to a statement from the Gulf Cooperation Organization.
The GCC said the drop in foreign investment came amid a decline in the global oil price and “unwelcome fluctuations in global financial markets”.
Kuwait’s economy shrank by 1.4 per cent in the third quarter of last year and exports fell by 7 per cent last year.
Kuwaiti exporters are already struggling to cope with the price drop, with prices hovering around $30 per barrel.
Saudi Arabia, which dominates the GCC, said the loss of investment meant that Kuwait needed to do more to boost its economy.
“The GCC is committed to supporting the Kuwaiti economy to overcome the challenges in order to provide economic stability and improve competitiveness in the region,” the statement said.
“To achieve these objectives, GCC and Kuwait have reached agreements to provide support to Kuwaiti firms and sectors in the areas of investment, trade, financial services, health care and infrastructure, among others.”
Saudi Arabia has been cutting subsidies for the oil-rich Gulf nation, which exports more than half its crude oil.
Kuab Al-Fadil, Kuwait’s energy minister, said last month that foreign investment had plunged as much 15 per cent since the beginning of the year, and that the GCC and the Kuwait Oil Corp (KOC) were committed to finding ways to diversify the country’s economy.