Al-Alaq urges Türkiye to open accounts for Iraqi banks
The Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, urged Turkish banks on Wednesday to open accounts for Iraqi banks to expand financing channels for importing goods and services between the two countries, stressing cooperation in the field of settlements for users of Iraqi cards in Türkiye.
This came during a meeting between Al-Alaq and the accompanying delegation with his counterpart, the Governor of the Central Bank of Turkey, Fatih Karahan, in Istanbul, according to a statement issued by the Central Bank of Iraq.
The statement said that the two parties discussed the launch of new direct mechanisms for trade transfers between Iraq and Turkey, marking the beginning of a new phase in strengthening banking relations between the two neighboring countries.
The statement quoted Al-Alaq as saying that the Turkish Central Bank supports the steps of the Iraqi Central Bank in regulating financial operations between the two countries in a way that contributes to facilitating commercial transactions.
In a separate meeting, Governor Ali Mohsen Al-Alaq and his accompanying delegation met with the general administrations of the branches of Turkish banks operating in Iraq, stressing the need to expand fruitful trade options between the two countries, especially in the banking sector.
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The Iraqi government is interested in cooperating with major international oil companies.
Prime Minister Mohammed Shia al-Sudani expressed, on Thursday, the interest of the current federal government he heads in cooperating with major international oil companies and keenness to attract investment, especially in the gas and clean energy sectors.
This came during his meeting with Shell’s Executive Vice President for the Extraction Sector, Peter Costello, and the company’s Director in Iraq and the Emirates, according to a statement issued by Al-Sudani’s media office.
The statement said that during the meeting, aspects of cooperation with the company in the field of energy were discussed, as well as the progress of work on its major projects in Iraq in the field of extraction, and the investment opportunities that the global company can contribute to, within the development of the oil, gas and clean energy sector.
He added that the meeting also discussed carbon emission reduction projects, in addition to the possibility of their contribution to integrated energy projects, increasing the added value of oil wealth, gas and condensate production, and working within global environmental determinants.
Al-Sudani expressed the government’s interest in cooperating with major international oil companies, and its keenness to attract and develop investments in the energy sector, especially gas and clean energy investments.
He stressed the provision of support and assistance to investors interested in developing these sectors, in a way that serves the interests of Iraq and the targets adopted by the government program, and modernizing the infrastructure of the economic sectors.
The Prime Minister directed continuous communication between the Ministry of Oil and Shell Company to achieve projects that serve Iraq and are consistent with the requirements of economic development and the government’s approach to expanding revenues within the oil sector and its investments.
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Iraq’s oil between two options.. “Chinese dragon” in the arena and government ambition towards the West
China no longer hides its desire to control the oil fields in Iraq, taking advantage of the withdrawal of Western companies from some fields, in addition to competing with several Chinese companies in the licensing rounds that Iraq announces from time to time, whether oil or gas, and trying to obtain the areas announced by the Ministry of Oil even if they return with small profits .
In return, Iraq is trying to keep European and American companies to develop its oil and gas fields, considering that these companies have extensive experience and advanced capabilities in the field of energy and are able to raise Iraq’s oil and gas capabilities.
Western companies “develop society”
Former Oil Minister Ihsan Abdul Jabbar told Shafaq News Agency: “The real investment that produces real value for the country, develops society and people, and raises the level of work ethics is what Western companies do.”
He added that “companies of other nationalities are good at work but do not meet all these requirements,” noting that “the ministry is trying to bring the best companies capable of creating a good social and work environment and implementing projects at the cheapest prices and with the highest return.”
Iraq seeks to attract investments, especially from American and European companies, in the associated gas sector in order to reduce gas flaring and boost production.
Self-sufficiency
In turn, the Undersecretary of the Ministry of Oil for Distribution Affairs, Hamid Younis, indicated during an interview with Shafak News Agency, that “the Ministry of Oil is working to encourage foreign companies to work in Iraq, and the current government is developing plans for investment and cooperation with international companies, and Iraq is keen to develop the gas sector and achieve progress.”
With the goal of achieving gas self-sufficiency within five years, Iraq is actively seeking to attract investment, with the United States encouraging American companies to enter the country’s energy sector.
High-level Iraqi delegations have visited the United States twice this year to meet with U.S. government officials and private sector companies, with the second visit resulting in several deals.
Younis points out that “permission has been granted to American and European companies to work with the Iraqi government, and the American government is also making plans to cooperate with local Iraqi companies.”
It is noteworthy that American interests in Iraq are dual. On one hand, they work to limit the growing Chinese influence in the Iraqi energy sector, and reduce Iraq’s dependence on electricity and gas imports from Iran.
As major Western companies pull out of Iraq’s energy sector, the country has turned east to achieve its goals of boosting crude oil and gas production capacity and reducing gas flaring.
For example, PetroChina took over the operation of the West Qurna 1 project after ExxonMobil exited in 2023, following the sale of its 22.7% stake to Iraq’s Basra Oil Company.
It is worth noting that China’s success in the Iraqi energy sector has been ongoing for a long time, and China is the largest buyer of Iraqi crude. During the first nine months of 2024, China imported 33.42% of Iraqi crude.
Chinese companies have proven their efficiency, which is equal to that of European companies, but the latter think about high profitability and low risk, while the Chinese do not care much about these two factors.
Competition
In this regard, oil expert Hamza Al-Jawahiri said in an interview with Shafak News Agency, “Chinese companies have a very high competitiveness with the rest of the international companies, and the licensing rounds are open to everyone, so when Chinese companies win contracts, they have the right to work in the fields they won with merit and transparency.”
He points out that “Iraqi laws do not allow companies, whether Chinese or otherwise, to dominate oil or gas fields in terms of their workers, as Iraqis must participate in these fields, and once the contract period ends, the companies withdraw from the fields they developed.”
Al-Jawahiri continues, “Chinese companies have won many of the licensing rounds announced by Iraq because they are not greedy like the Americans and Europeans, but rather they are satisfied with a small profit.”
Western companies’ sales of stakes in oil and gas fields have increased China’s control over Iraq’s oil sector. In the latest licensing round in May, major Chinese companies won 10 of 13 oil and gas projects, as did smaller Chinese companies, indicating a deeper entrenchment of Chinese companies in Iraq’s oil sector.
Work at lower costs
For his part, economic expert Hilal Al-Taan, in an interview with Shafaq News Agency, pointed out that “Chinese companies are large and rely on specialized consulting cadres. They have also deepened their relations with Iraqi local communities and employed many of them. They work under lower conditions and costs and with an efficiency that is no less good than their global counterparts.”
He added, “The major Western companies sold their shares after the decline in expectations of global demand growth, and Iraq’s decline in the targeted peak production, which was planned to reach nine million barrels per day, but the reality of the global market and export capabilities prevented reaching it. In addition, Iraq’s obligation for companies to reduce production to implement OPEC Plus requirements led to Western companies selling their shares to their Chinese counterparts.”
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Prime Minister’s advisor rules out oil price collapse: Trump’s policy will not sacrifice petrodollar
The economic advisor to the Prime Minister, Mazhar Muhammad Salih, ruled out that the policy of US President-elect Donald Trump would “sacrifice” the petrodollar.
Saleh told Al Furat News Agency: “There are three restrictions that I find that prevent the deterioration of crude oil prices in the global market. The first is that the United States is still the largest oil producer in the world, and major American oil companies have invested in line with an oil price of no less than $70 per barrel, to cover the costs of producing shale oil at the break-even point.”
He added, “As for the second restriction, President Trump’s policy will not sacrifice the petrodollar to make the oil dollar a dollar supply that exceeds demand for it, at a time when the United States and its new foreign policy find themselves making the dollar the strongest currency in the world, within the framework of its dominance over the global economy. Therefore, the new American administration is keen for the dollar to present itself again and for demand to exceed supply. Therefore, the weakness or deterioration of petrodollar revenues only means a weakening of the global oil currency and the basis of the dollar’s dominance.”
Saleh continued, “As for the third restriction, the deterioration of oil prices will allow China, the largest oil importer in the world, to obtain cheap energy resources, which is inconsistent with the economic competition between China and the United States in dominating the sources of growth and economic power in the world.”
He pointed out that, “In light of the above, I find that the three above-mentioned restrictions are what will prevent the collapse of the oil asset cycle if it is about to happen, taking into account not being overly optimistic, which requires fiscal and monetary policies within the framework of preventive policies that mitigate the impact of international factors on stability and economic growth in our country.”
Economic analysts have warned of a sharp 40% drop in oil prices next year if the OPEC+ group abandons current oil production restrictions.
