Saturday Evening Iraq Economic News Highlights 10-8-22
Oil jumps 4% to its highest level in 5 weeks after the decision of OPEC + to cut production
Energy Economy News-Baghdad Oil prices jumped about four percent on Friday, hitting a five-week high, supported by the OPEC+ decision to make the biggest supply cut since 2020, despite worries about a recession and rising interest rates.
Oil rose for the fifth day in a row despite the rise of the dollar after data showed that the US economy is creating jobs at a strong pace, while reinforcing expectations that the Federal Reserve (the US central bank) will continue to tighten monetary policy sharply.
A stronger dollar makes oil more expensive for holders of other currencies, and usually affects oil and other risky assets.
Brent crude futures rose $3.50, or 3.7 percent, to $97.92 a barrel. US West Texas Intermediate crude also rose $4.19, or 4.7 percent, to $92.64 a barrel.
That was the highest closing level for Brent since August 30 and for US crude since August 29. The two contracts recorded gains for the second week in a row, and the largest percentage gain since March this week. During the week, Brent rose by about 11 percent and US crude by 17 percent.
“One of the main implications of the recent OPEC cuts is the likely return to the $100 oil price,” said Stephen Brennock of BVM oil brokerage.
The cut decided by the OPEC + cartel, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, comes before the European Union bans Russian oil and will reduce supplies in a market already suffering from tight supply.
On Thursday, US President Joe Biden expressed his disappointment with the OPEC+ plans. He and other officials said the United States was studying all possible alternatives to prevent price hikes.
100 . views Added 10/08/2022 – 9:04 AM Update 10/08/2022 – 12:56 PM
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Approximately 300,000 Barrels Per Day .. Iraq’s Oil Exports To America Rise Within A Week
Shafaq News/ The US Energy Information Administration announced, on Saturday, that Iraq’s oil exports to America increased to 275,000 barrels per day during the past week.
The administration said in a report seen by Shafak News Agency, “The average US imports of crude oil during the past week from eight countries amounted to 5.220 million barrels per day, down by 390 thousand barrels per day compared to the previous week, which amounted to 5.610 million barrels per day.”
She added that “Iraq’s oil exports to America amounted to an average of 275,000 barrels per day last week, higher than the previous week, when oil exports to America reached an average of 202,000 barrels per day.”
The administration also indicated that “most of America’s oil revenues during the past week came from Canada, at a rate of 3.298 million barrels per day, followed by Mexico at a rate of 539,000 barrels per day, and oil revenues from Saudi Arabia at a rate of 398,000 barrels per day, and then Colombia at a rate of 360 thousand barrels. Daily”.
According to the administration, the amount of US imports of crude oil from Ecuador amounted to an average of 203 thousand barrels per day, and from Brazil at a rate of 104 thousand barrels per day, and from Libya at a rate of 43 thousand barrels per day, while it did not import any quantity from Russia or Nigeria. LINK
The Secretary-General Of The Organization: The Decision Of OPEC + Is Proactive And Considered, And Was Taken Unanimously By 23 Countries
Shafaq News/ The Secretary-General of OPEC, Haitham Al-Ghais, said on Friday that its decision to reduce oil production is considered and was taken unanimously by member states.
In a statement to the Saudi-funded Al Arabiya satellite channel, Al-Ghaid said that the OPEC + decision carries wide flexibility to deal with the expected economic uncertainty.
He explained that the decisions of OPEC + aimed at balancing supply and demand, not prices, adding that the decision was proactive and thoughtful and was taken unanimously by 23 countries.
Al-Ghaid also indicated that the organization does not take sides with one party against another, and we are not a political organization, stressing that the organization is working to ensure oil flows.
On Wednesday, the Organization of (OPEC +) agreed to a new reduction in oil production, while oil prices rose in the US global market. LINK
Deputy: The Fuel Crisis Was Caused By Financial And Administrative Corruption In The Oil Products Distribution Company
Political news October 8, 2022 Representative Muhannad Al-Khazraji, a member of the Parliamentary Oil, Gas and Natural Resources Committee, accused the Oil Products Distribution Company of causing a stifling fuel crisis in Iraq, indicating that the crisis was caused by financial and administrative corruption in the company.
Al-Khazraji stressed in a statement, “The waste of public money in the Oil Products Distribution Company affects the most important joint of the Ministry of Oil, which will expose those involved in the measurement and natural file and refer them to the judiciary. .
He pointed out, “The Parliamentary Oil, Gas and Natural Resources Committee is working to monitor the performance of institutions associated with the Ministry of Oil in order to eradicate the corruption that dominates some of the joints of the ministry, which is the vital artery and the main engine of the national economy.” https://khabaar.press/archives/99486https://khabaar.press/archives/99486
A Year Of Political Paralysis Deprives Iraq Of Important Economic Opportunities
October 8, 2022 Baghdad, – (AFP) – On October 10, Iraq will complete a full year since the early parliamentary elections, in the absence of a new government or budget due to political paralysis that threatens to deprive the country of much-needed infrastructure projects and reform opportunities.
Iraq, an oil-rich country wracked by decades of conflict, generated huge oil revenues in 2022. The money is in the Central Bank, which has $87 billion in foreign currency reserves.
But benefiting from these funds for projects that Iraq needs is contingent on forming a government with full powers and a budget that controls the pace of spending.
Yasar Al-Maliki, an economist at the Middle East Economic Survey, explains that “infrastructure projects need years of steady funding from the government,” adding that “the political situation has caused great turmoil that has further weakened Iraq’s already fragile position in front of its investors.”
He explains that “the political crisis has added to other long-standing concerns, especially security and corruption.”
Political disputes are still continuing between the two prominent Shiite camps, the Sadrist movement on the one hand, and the coordination framework, which includes blocs representing the Popular Mobilization, an alliance of armed factions loyal to Iran that have become affiliated with the state apparatus, on the other hand, a year after elections that were already hesitant among Iraqi voters. . With the two sides of the political crisis unable to resolve their differences, a new government has yet to be formed.
– ‘Great Opportunity Lost’ –
On August 29, violence erupted in Baghdad, between fighters from the Sadrist movement on the one hand, and the security forces and the Popular Mobilization Forces on the other, killing about 30 al-Sadr supporters.
And considered the United Nations representative in Iraq, Jenin Plaschaert, before a recent Security Council session, that these events were supposed to represent a “warning bell,” adding that “the situation is still very volatile.”
And she continued, “Many Iraqis have lost confidence in the ability of the political class in Iraq to work for the benefit of the country and its people.”
While the World Bank estimated the growth of the Iraqi economy at an average of 5.4% annually between 2022 and 2024, “the macroeconomic outlook is surrounded by a large degree of risks given the heavy dependence on oil, the persistence of budget stalemates, and the delay in forming the new government.” , as stated in a report in June.
As a result of the absence of a budget, Iraq spends today on the basis of the Federal Financial Management Law, that is, what was spent in the previous budget divided over 12 months, which does not reflect the reality of the revenues that the country achieved in 2022.
However, “these are minimal budgets… that resemble the past, not the present or the future, and there are no opportunities for economic growth, and they deprive Iraq of major strategic projects,” according to the Prime Minister’s financial advisor, Mazhar Salih.
“We are missing out on great opportunities, opportunities to invest in important, strategic and planned projects,” he told AFP.
For example, Iraq signed a contract last summer with the French company “Total Energy”, which includes several projects, especially in the field of the exploitation of associated gas and solar energy, worth ten billion dollars, partially funded by the Iraqi government, which is still in its infancy.
And “the Iraqi government is working hard to speed up work in it and remove obstacles before it,” according to a source familiar with the file.
Other projects are progressing “at a slow pace” in the oil sector, and with “the absence of a government with full powers, the Ministry of Oil cannot finance, sign and award contracts for these basic projects,” explains Yasar al-Maliki.
– ‘People Are Tired’ –
To meet emergency expenditures, the Iraqi parliament enacted an emergency subsidy law in June, worth 25 trillion dinars ($17 billion), that allowed meeting emergency needs for the population and buying grain to ensure “food security,” but also ensuring the purchase of energy and electricity from abroad.
With the year 2023 approaching without a budget, the authorities will have to either legislate a new similar food security law or continue spending on a 12-month basis, i.e. “reduce spending again,” as Yasar al-Maliki explains.
Upon resigning from his position as finance minister in August, Ali Allawi, the owner of the economic reform project that had not yet fully turned into a tangible reality, did not hesitate to define the problem quite frankly.
“All plans and programs of the government are always constrained by the need to obtain broad agreement from a fractured political class,” he wrote in his resignation letter.
“All calls for reform have been hampered by the political framework of this country,” he added.
Out of every ten young people, four are unemployed, according to the United Nations, while a third of the 42 million population are below the poverty line.
Despite the huge oil revenues, the life of Amin Salman, the sixty-year-old retired from the Iraqi army, who was among the demonstrators on the third anniversary of the unprecedented October 2019 uprising, which came out against the regime and corruption, has not improved much.
“The country is going through a political crisis, and this political crisis affects people,” says the man from Tahrir Square in central Baghdad. People are all tired.”
The man earns only 400,000 dinars ($274), a sum that barely covers his daily income, and his two sons are unemployed.
He adds, “Iraq has billions, money and gold, but politicians are only interested in their parties and pockets.” https://www.azzaman.com/archives/410935
After Losing $800 Million… Integrity Intervenes And Invites The Government – Urgent
Policy 2022-10-08 | 07:25 1,938 views Alsumaria News – Baghdad The Parliamentary Integrity Committee called, today, Saturday, governmental and supervisory agencies to prevent travel of some managers and senior cadres in the Tax Authority who have been changed until the end of the administrative and judicial investigation, after it was confirmed that there was a theft in the revenues of the trust accounts belonging to the general tax in Rafidain Bank, which exceeds 800 million dollars.
Committee member MP Ahmed Al-Rubaie said in a statement received by Alsumaria News, “The Ministry of Finance indicated that it had formed a committee to conduct an administrative investigation into the matter, and the investigative committee recommended precautionary recommendations against the former general managers.”
Al-Rubaie added, “The ministry confirmed that it is awaiting the judicial investigation,” calling for “the travel ban of some directors and senior cadres in the Tax Authority who have been changed until the investigation is over.” LINK
