Oil Price Fall Hitting Gulf Arab Incomes

Source: Reuters 12/9/2014, Location: Middle East

Kuwait's emir said that falling oil prices were affecting the incomes and development programmes of petroleum-producing Gulf Arab states.

Brent crude oil fell to a 5-year low near $65 a barrel in volatile trade on Tuesday, sliding for a sixth consecutive session on signs of a growing supply glut.

Brent averaged around $110 between 2011 and 2013 and topped $115 in June. Losses accelerated in late November after OPEC decided against reducing its output target, despite its forecasts of a surplus and calls from members including Iran and Venezuela to cut production.

"Among the challenges we face as oil-producing and exporting countries is the decline in prices to levels that have started to affect the income and development programmes of our countries," Kuwaiti Emir Sheikh Sabah al-Ahmed al-Sabah said in a speech in Qatar at the start of the annual summit of the Gulf Cooperation Council (GCC).

Sheikh Sabah suggested one of the solutions was greater economic integration within the GCC, a goal often invoked but rarely enacted by the member countries - Kuwait, Saudi Arabia, Oman, Bahrain, Qatar and the United Arab Emirates.

"We are called today to strengthen the path of our shared economic work ... emphasising the necessity of implementing all the agreed-upon important economic decisions between GCC countries to be able to confront the effects of these challenges."

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