A decline in oil revenues due to the halt of oil exports through Hormuz Straits increased Kuwait’s 2025-2026 budget deficit by nearly 13 percent despite higher non-oil income.

The actual shortfall widened to around 7.1 billion Kuwaiti dinars ($23 billion) at the end of that fiscal year on 31 March compared with a projected deficit of KWD 6.3 billion, Kuwait’s finance ministry said in a report on its website.

“The deficit increased at the end of the 2025-2026 fiscal year due to pressures caused by the decline in oil revenues despite an improvement in the non-oil income and lower actual spending mainly on projects,” the ministry said.

Kuwait released its 2025-2026 budget in March 2025, with spending forecast at KWD 24.5 billion and a deficit higher than the previous year’s shortfall of KWD 5.6 billion.

Revenue from the state-owned Kuwait Petroleum Corporation (KPC) and its affiliated companies was put at about KWD 23.06 billion, nearly KWD 2 billion less than in this fiscal year because of lower average oil prices.

Actual revenues were nearly 9.7 percent lower than projected while spending was around 3.8 percent below the forecast expenditure of about KWD 24.5 billion, the ministry said.

Oil revenues, which generally account for over two thirds of the total revenues, slumped by around 11 percent to nearly KWD 13.58 billion, it said, adding that the country’s non-oil income stood at around KWD 2.87 billion.

“Total revenues declined by around 25.4 percent during 2025-2026 compared with the previous fiscal year,” the ministry noted.

Kuwait, a founding OPEC member, was shut off the global oil market after Iran closed Hormuz during its six-week war against the US and Israel in the first quarter of 2026.

(Writing by N Saeed; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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