Al-Jazzaf: 'Europe' Protests Raise the Geopolitical Value of Kuwaiti Oil
Sultan Al-Jazzaf affirmed that European protests and rising oil prices reflect Kuwait's role as a geopolitical stabilizer, warning of catastrophic global economic repercussions if the war continues
Translated by Qiyas from السياسة — Original source
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As the global economy suffers under the weight of a crippling energy crisis that has cast a heavy shadow over the European continent, triggering a massive wave of political and economic turmoil, the Kuwaiti oil sector emerges as a key strategic stabilizing element for international markets. Amidst the ongoing war, now in its eighth month and intensifying across the region, unprecedented pressure has been placed on global supply lines.
In this context, economist and member of the Kuwait Economic Association, Sultan Al-Jazaf, confirmed that the near-total disruption of maritime navigation in the Strait of Hormuz has caused a partial paralysis in Gulf crude oil flows, pushing oil and fuel prices to record levels exceeding $110 per barrel—levels unaffordable for Western consumers.
Al-Jazaf noted that this sharp rise in energy costs has directly translated into wild jumps in living costs within European cities, reaching approximately 25%. This includes record-high prices for heating and automotive fuels, alongside sharp inflation in the real estate sector, rental prices, and basic food products. These factors have ignited public protests and political tensions that threaten the stability of European governments, which are now grappling with a dual crisis: securing supplies and calming an angry public that has taken to the streets in hundreds of thousands across more than 10 European capitals to protest the high cost of living and the failure of economic policies to contain the effects of the ongoing regional conflict.
Al-Jazaf added that the situation would darken further if the war continues for more than a year, as the European economy is expected to enter a prolonged stagflationary recession. This could lead to the collapse of energy-intensive heavy industries and a decline in GDP by 3 to 5%. If the closure of the Strait of Hormuz—which handles about 20% of global oil consumption—persists, pressure on Kuwaiti and Gulf tankers will double, leaving no alternative but to create new routes to increase production and export through other channels. This places Kuwait at the forefront of nations whose export stability determines the economic security of both the West and Asia, thereby enhancing the geopolitical influence of Kuwaiti oil diplomacy in shaping the global energy map for the coming period.
If the war continues for two years or more, Al-Jazaf stated that the impact on global inflation would be catastrophic, marking the beginning of an unprecedented financial collapse. A prolonged closure of the Strait of Hormuz would drive oil prices above $180 per barrel, rapidly affecting the global consumer price index with increases ranging from 12% to 15%. This would trigger a second wave of inflation hitting all productive and service sectors without exception. Inflation would not be limited to fuel prices but would directly spread through global supply chains, raising maritime shipping costs by 300% and the cost of fertilizers and chemicals. This threatens a global food security crisis, with grain and basic commodity prices rising by over 40% in both developing and advanced economies. Consequently, major central banks, led by the US Federal Reserve and the European Central Bank, would be forced to raise interest rates to record levels exceeding 8% as the sole, painful tool to curb prices. This, in turn, would lead to a drying up of financial liquidity and increased borrowing costs for businesses and individuals, plunging the global economy into complete stagnation, accompanied by a slump in international trade and a sharp rise in global unemployment to 9%.
Al-Jazzaf pointed out that the prolonged duration of the war will transform the crisis from an energy resource shortage into a collapse in global purchasing power, prompting markets to begin repricing assets based on complex geopolitical factors that will persist for many years. Therefore, the solution lies in the Kuwait Petroleum Corporation accelerating oil stockpile increases in Asia, while also directing efforts to expand storage in Europe, the Americas, and across all continents, alongside the urgent need to establish major food industries in Kuwait.
