US embassy cable - 04KUWAIT1749

S E C R E T KUWAIT 001749 
 
SIPDIS 
 
E.O. 12958: DECL: 06/01/2014 
TAGS: ECON, ENRG, EPET 
SUBJECT: (U) KUWAIT: G-7 FINANCE MINISTERS' STATEMENT AND 
DEMARCHE 
 
REF: STATE 119065 
 
Classified By: CDA FRANK URBANCIC FOR REASONS 1.4 (B) AND (D). 
 
1.  (S) Ambassador delivered the G-7 Finance Ministers' 
Statement and reftel talking points to Energy Minister Shaykh 
Ahmed al-Fahd al-Ahmed al-Sabah on 1 June at the VVIP lounge, 
Kuwait City International Airport.  Shaykh Ahmed was en route 
to the 3 June OPEC meeting. 
 
2.  (S) The Minister told Ambassador that the GOK concurred 
in the G-7 observation that stable prices and steady, 
consistent and predictable oil supplies are essential for the 
global economy.  He pledged that the GOK is prepared to do 
its part in support of meeting those objectives. 
 
3.  (S) Shaykh Ahmed noted, however, that he thought there to 
be "plenty of oil on the market already."  He estimated that 
oil was now overpriced by $8.00 a barrel and he attributed 
this to "strict environmental regulations (not further 
identified) in the individual U.S. states" and to hoarding by 
downstream energy marketers due to "concerns over Iraq and 
the Middle East situation."  "The problem is on your side, 
not ours," he concluded.  Nevertheless, Kuwait, he offered, 
would support an increase from 23.5 to 25.5 or 26 million 
barrels per day (bpd) in overall OPEC output in order to 
stabilize the market. 
 
4.  (S) Shaykh Ahmed said that Kuwait now produces less than 
2.4 million bpd with spare capacity in the neighborhood of 
200,000 bpd.  Declaring that "We know our responsibilities," 
he assured Ambassador that Kuwait would increase production 
by 150,000 bpd, bringing its total output to approximately 
2.5 million bpd, should OPEC so agree at the Beirut meeting. 
URBANCIC