Kuwait oil workers' strike ends after three days

Kuwait’s oil workers went back to work on Wednesday after a three-day strike that helped to underpin oil prices, which had been under pressure after the failure of weekend talks over an output “freeze” by major producers.

Benchmark North Sea Brent crude futures were down 66 cents – or 1.5 per cent – at US$43.37 per barrel in late afternoon trading UAE time. However, prices have been fairly stable above $40 per barrel for most of this month on signs that the world oil glut is starting to abate.

A spokesman for Kuwait’s oil workers’ union said the short-lived strike had made the point about their importance to the country, although the union apparently succumbed to pressure from Kuwait’s leadership who had warned they would not negotiate proposed benefits cutbacks while the workers were striking.

“We’re glad to announce that the strike has succeeded in preserving the rights of the workers in the oil sector,” said Adel Al Fadhel, the spokesman for the Kuwait Oil Company Workers’ Union.

Mr Al Fadhel credited Kuwait’s ruling emir, Sheikh Sabah Al Ahmad Al Sabah, for bringing the strike to an end, saying he “intervened and guaranteed to preserve the rights of the workers according to the law”.

Mr Al Fadhel also said the emir had promised that the workers would not be disciplined for taking part in the strike, according to Kuwait’s official news agency, Kuna.

The workers’ about-face came only hours after its leaders called a press conference to say they planned to continue their strike.

Anas Al Saleh, Kuwait’s acting oil minister, had called on workers in a televised interview on Tuesday night to go back to work so that talks could resume.

The workers’ action cut crude output from about 3 million barrels per day to 1.5 million bpd, while also slowing refinery throughput from almost 1 million bpd to just above 500,000 bpd.

However, with the crude oil and refined products storage available, the short-lived outage is not likely to cause much disruption to oil and products trade.

Sheikh Talal Al Khaled Al Sabah, the chief executive of the Kuwait Oil Tanker Company and the oil sector’s official spokesman, said on Wednesday that it would take about three days to get back to full rates of oilfield and refinery operation.

He said the sector’s emergency plan had been implemented and was aimed at making sure there was no disruption to international or domestic oil and products supplies.

The dispute arose over government plans to limit oil workers’ benefits and include them in a payroll restructuring study – the so-called strategic alternative payroll system.

Kuwait’s government-run oil sector employs about 20,000 workers in total and has enjoyed a high degree of protection as the country’s most strategic industry and the source of most of its wealth.

Kuwait Petroleum Corporation (KPC) had announced plans earlier this year to study austerity measures, including cuts to wages and bonuses.

This month, Mr Al Saleh, who is also the finance minister, had promised to suspend the study of oil sector cuts pending negotiations, but the unions rejected anything but an abandonment of the whole austerity project for the oil sector.

The head of Kuwait’s oil workers’ union, Saif Al Qahtani, said at a rally this month that the union would resist the strategic alternative measures as well as any efforts to privatise the sector.

The major producers of the Arabian Gulf have been under unprecedented pressure since the collapse of oil prices over the past 18 months, which has led to severe budget constraints and accelerated measures to reform economies.


Follow The National’s Business section on Twitter


Share This Post