Kuwait is a small, rich, relatively open economy with proven crude oil reserves of 96 billion barrels (15 km³) - 10% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income. Kuwait's climate limits agricultural development. Consequently, with the exception of fish, it depends almost wholly on food imports.

About 75% of potable water must be distilled or imported. Higher oil prices put the FY99/00 budget into a €1.7 billion ($2 billion) surplus. The FY00/01 budget covers only nine months because of a change in the fiscal year. The budget for FY01/02 envisioned higher expenditures for salaries, construction, and other general categories.

Kuwait continues its discussions with foreign oil companies to develop fields in the northern part of the country.

By 1990 the country earned more from foreign investment than from oil exports. The expenses of the Iraqi invasion and postwar reconstruction placed a heavy economic burden on the country, but by the mid-1990s Kuwait had resumed its preinvasion prosperity. Gross domestic product (GDP) for 2005 was $53.31 billion, giving Kuwait a per capita GDP of $22,800. The labor force totals 1,670,000 people,only about one fifth of whom are Kuwaiti citizens.

The Central Bank of Kuwait in the capital city issues Kuwait’s currency, the Kuwaiti dinar. The dinar is valued at 0.351676 KWD per 1EUR and at 0.292010 KWD per 1USD, making it the highest-valued currency in the world.

Because the government owns the oil industry, it controls most of the economy—in all, about 75 percent of the GDP. Kuwait’s oil exports vary depending on internal needs (almost all of Kuwait’s energy is derived from oil), international demand and prices, and production quotas fixed by the Organization of Petroleum Exporting Countries (OPEC), of which Kuwait is a member. OPEC’s quotas, however, are difficult to enforce, and Kuwait and other countries have been accused of violating them. In 2002 oil production was 692 million barrels.

The chief oil companies are -

• Kuwait Petroleum Corporation (KPC) - International Marketing and Mother Company
• Kuwait Oil Company (KOC) - A crude oil exploration and development company
• Kuwait National Petroleum Company (KNPC) - Runs Oil Refineries across Kuwait
• Petrochemicals Industries Company (PIC) - Petrochemical & Fertilizers manufacturer
• Kuwait Petroleum International (KPI - Q8) - Runs refining and marketing business overseas
• Kuwait Foreign Petroleum Exploraton Company (KUFPEC) - Intl. Oil Exploration Company
• Equate (EQUATE) - A Petrochemical company formed by (PIC) and (Dow Chemical)
• Kuwait Oil Tanker Company (KOTC) - Crude Oil Shipping
• Kuwait Aviation Fueling Company (KAFCO) - Aircraft Fueling
• Kuwait Gulf Oil Company (KGOC) -Oil & Gas exploration and production in the divided zone. A shared joint venture with Kingdom of Saudi Arabia
• Oil Sector Services Company (OSSC) -Handles all construction projects , maintenance , security , fire fighting , and medical services to all oil sector employees and their families.
• Oil Development Company (ODC)