Iraq On The Brink Of Chaos As Oil Revenues Fall

[SocalDinar]

This article is for those that would like to research the dinar only. Please do not read if you do not want to read or hear about anything negative regarding Iraq.

 

Iraq On The Brink Of Chaos As Oil Revenues Fall

By Charles Kennedy

Posted on Sun, 21 February 2016 00:00 | 1

 

During a sombre visit to Germany last week, Iraqi Prime Minister Haider al-Abadi urged the international community to help boost his country's crisis economy in the face of plummeting crude oil prices, underscoring a desperate situation in which Iraq has lost 85 percent of its oil revenues.

Iraqi oil revenues have fallen to just 15 percent of what they used to be, the embattled prime minister said, despite a boost in production ordered last year.

The surge in production has failed to compensate for the collapse of oil prices, and the situation is dire when oil revenues constitute around 43 percent of Iraq’s gross domestic product (GDP), 99 percent of its exports and 90 percent of all federal revenues.All told for this year, the Iraqi government expects to export 3.6 million barrels of oil per day (bopd).

Only last October, Iraq’s oil revenues were holding at about $40 billion, excluding the cost of oil production.

This has prompted the Al Abadi government to announce strict austerity measures across institutions, including significant salary cuts for middle-class government employees. Protest rallies were held against delayed salaries, which later turned violent in some parts of Iraq, including the Kurdistan region.Under these circumstances, one must question the legitimacy of the deal Baghdad has now offered to the Iraqi Kurds.

Earlier this week, Baghdad extended an offer to pay the salaries of the KRG’s public employees in return for a halting of unilateral oil exports by the Kurds. Both sides need this deal. The KRG is struggling to pay salaries, and protests are mounting—threatening the stability of what was not long ago the only peaceful and secure place in all of Iraq.

But most significantly, both Baghdad and the KRG need to ensure that the Kurdish Peshmerga fighting forces are being paid, because this is the key bulwark against further Islamic State (ISIS) advancements in the disputed territories of northern Iraq, around Mosul and oil-rich Kirkuk.

The Iraqi Kurds have accepted the deal, but they don’t really believe it will happen. Baghdad has consistently failed to make good on deals, and with its oil coffers depleted, it’s unclear how the central Iraqi government can afford this.

Al Abadi’s government inherited Iraq’s civil war-ravaged sluggish economy back in September 2014 and set out to try to consolidate the administration, which was bursting at the seams with a massive budget deficit, inherent bureaucratic corruption and the ongoing war burden with ISIS.The current market turmoil has created a once in a generation opportunity for savvy energy investors.

Whilst the mainstream media prints scare stories of oil prices falling through the floor smart investors are setting up their next winning oil plays.

So with low oil prices depleting revenues, Baghdad finds itself in an uphill struggle to fund the war against ISIS, which continues to control over 10 percent of Iraq’s oil fields, including those in the Nineveh governorate. ISIS hasn’t gotten anywhere near the oil-rich area of Basra—where the serious exports are—but Basra has its own problems, which are being compounded under the multiple pressures.

All the talk of potential independence—founded on unilateral oil flows—for Iraqi Kurdistan has lent more impetus for calls for more control over oil wealth management and distribution in Basra. And Shi’ite tribal clashes are raging in Basra, far too close to the main oil installations, prompting Baghdad to divert security forces there—away from the ISIS battle.

The situation in Basra will likely intensify, too, with growing protests over the central government’s imposition of a higher customs tariff as of 18 January. Profit margins are threatened, and there will be a backlash in a province where autonomy sentiments are already running high.

The country has been losing up to 400,000 barrels of oil per day because of ISIS advances—even after recapturing a couple of oil refineries like Bajii in the Saladin Governorate, north of Baghdad, from ISIS in October last year.

Related: Activist Investors Crushed By Oil Crash

All eyes are now on the giant Majnoon oil field in Basra, in the south, which is considered to be one the richest oil fields in the world, with an estimated 38 billion barrels of oil reserves. Majnoon has approximately 13 different oil and gas reservoirs, but this area, too, is now becoming a flashpoint of unrest and tribal clashes.

As such, the deal brought up earlier this week by Saudi Arabia, Russia, Venezuela and Qatar to freeze oil output to January levels will not likely see the light of day. It requires the same commitment by Iran—which is not keen—and Iraq, which is hesitant to join in.

In January, Iraqi production hit a record high, averaging 4.775 million barrels per day. January exports averaged 3.9 million bpd. But with oil prices averaging right now under or around $30 per barrel, these production figures won’t help. Iraqi oil is going for about $22 per barrel. That’s half of what it needs to be to meet budgetary requirements.

Nowhere are the stakes higher than in Iraq, and selling oil at half the price it would take to just break even could break this giant’s back. It certainly isn’t enough to stave off the unrest in Basra, not to mention the ISIS threat.

http://oilprice.com/Energy/Energy-General/Iraq-On-The-Brink-Of-Chaos-As-Oil-Revenues-Fall.html

 

[SgtFuryUSCZ]

***///

 

We're not worried, SoCAL... they've come too far to let it all go to hell-in-a-handcart now.

And they have plenty of loans, Chi-Com money and other resources to hold them up... including militarily.

We'll be okay... and they will, too... hang in there Iraq & DVers !  

[Antietam]

Yes, Sgt, they will hang on, but that is all they will be doing until oil hits $90 a bbl again. That could be 2-3 years down the road. Infrastructure and business reconstruction is stalled until the Iraqi budget becomes flush with petrodollars again. It is virtually impossible to even contemplate the CBI doing anything with its currency, either RV, RI, or RD, until the economy is booming again. They are barely surviving right now. So, in my opinion, don't believe anybody, guru or otherwise, who wants to convince you a big RV is coming tomorrow, next week, next month or even next year. I think it will be years before the economic/political conditions are conducive for any form of dinar revalue. Glass half empty opinion, but based on the reality of facts. Caz calls me his "dream-buster". Sorry.

[SgtFuryUSCZ]

***///

 

Is the IMF patient enough after all their hard work with Iraq to allow it to lay fallow that long, ANTIETAM...?

We kinda get the impression the IMF (global banksters) need a resounding success in the region and have

set their cap for Iraq to be just that... unless they're gonna dump Iraq and go with Iran..?

[Shabibilicious]

Yes, Sgt, they will hang on, but that is all they will be doing until oil hits $90 a bbl again. That could be 2-3 years down the road. Infrastructure and business reconstruction is stalled until the Iraqi budget becomes flush with petrodollars again. It is virtually impossible to even contemplate the CBI doing anything with its currency, either RV, RI, or RD, until the economy is booming again. They are barely surviving right now. So, in my opinion, don't believe anybody, guru or otherwise, who wants to convince you a big RV is coming tomorrow, next week, next month or even next year. I think it will be years before the economic/political conditions are conducive for any form of dinar revalue. Glass half empty opinion, but based on the reality of facts. Caz calls me his "dream-buster". Sorry.

 

Well then, no point wasting your time here.....come back in a few years and we'll catch up.  It'll be just like old times.     

 

GO RV, then BV

[coorslite21]

There are always 2 sides to every story.

 

 

Click to go to page…place cursor on Arabic text…..right click……drop down menu says….translate to English…click that….read article.

 

 

http://www.alsabaah.iq/ArticleShow.aspx?ID=110963

 

  

Arab League hails Iraq's economic measures

 

 

2/22/2016 0:00

 

 BAGHDAD - Farah pumice  

praised Chancellor of the Arab League measures the Iraqi government in the face of the financial crisis, calling for an international award for Iraq in order to overcome the challenges caused by the decline in the sale of crude oil prices in world markets. And saw a consultant of international arbitration Arab League Najat Hussein in a statement »Sabah», that «the government's actions need an international award, especially that Iraq is passing through more than a year of economic crisis. She pointed out that the economic situation facing the additional challenge as a result of the high financial needs to face the terrorist organizations of the security forces, which cost nearly one-third of the general budget for Iraq processing costs. She said Hussein, a sovereign Iraqi businessman, said that «the country is not bankrupt, as described by some local media or Arab, as it has the financial reserves of about $ 60 billion, in addition to deposits and property of the bank Rafidain and Rasheed government balance is estimated at $ 300 billion, the highest in the Middle East and the region, she says. And he praised the expert team of economic advisers working with the Prime Minister, indicating that they see and experience, but they are in dire need of international assignment. He announced the Information Office of the Prime Minister, Dr. Haider al-Abadi Earlier this month, the government put several measures and decisions concerning the subject matter of the five economic reforms, including the file, noting that the government's past steps to achieve restructuring of the economy in the country. Regarding the rapid and results of the government's measures, Hussein have shown that activation of the tax code has achieved good earnings in early 2016, they are allowed to pay the salaries of employees and retirees, and fully secure payments for this year. However Chancellor that the country has confirmed the need for further economic reform, especially since he has a precious natural resources, in addition to the important sectors (industry, agriculture) and the possibility monetize your properly, as well as religious, archaeological and recreational tourism resource, urging on the investment of these sectors to meet the challenges including the reconstruction of liberated areas, which represents the weight of another, as well as the need to secure displaced persons and bring them back to their areas.

 

 

of course this is Iraq .........who really knows anything????

[markb57]

" The current market turmoil has created a once in a generation opportunity for savvy energy investors."

 

This line caught my eye over everything else. Could it be this whole thing was staged to allow Iraq and other oil bearing countries to flounder and let the big money come in and scoup it up for nothing??

[rockfl9]

Mark:: The drillers and rigging cos are going bankrupt or at least scaling back... The only safe investments are refiners and drillers. Maybe pipelines.

MY error NOT drillers I meant retailers.

[caz1104]

LOL!!!

 

This is considered a positive article in the minds of........................................................NO ONE except LOPsters. Thus the sentence by cut & paste king at the top of the article.

[Antietam]

Iraq is a mess. We are years away from good economics in the sandbox. Without good economics, there can be no revalue of the dinar. When I say a revalue I'm talking about a revalue of the dinar that will be RECOGNIZED AND ACCEPTED by the world's financial system. If they don't recognize the RV, YOU CAN'T GET PAID!

[caz1104]

LOL!!!!

 

Ya gotta Love economic experts.....................with the names like...........Rockfish, Auntiem, Okie, Tiar!  Next time I need an expert opinion............. I won't go to a person verifiable credentials and a name that's not straight out of a Looney Toons cartoon, NOOOOOOOOOOO  I'll come here and ask professionals  like the above-LOL.  Guru's & LOPsters prey on the gullible.............please don't be that guy/gal. Both sets of clowns have an agenda and I can assure you it's only to benefit................................themselves.  

Edited March 4, 2016 by caz1104

[rockfl9]

Caz as usual you have nothing to add. Same old attempts to confuse with your usual DODA.  . Move on!   When you find that EXspurt that can explain how the big RV can/will happen come back.

[SocalDinar]

Iraq's M-2 is still over 82 Trillion dinar. A $1.00 RV would cost Iraq 82 Trillion dollars.

The United States  M-2 is around 12.5 Trillion USD

So if they were to RV to $1.00 their money supply would be worth over 6 times the United States Money supply.

 

Not much he can add to that Rock.

[rockfl9]

By my estimate using linear growth M2 should be 88T dinar by now. Oil revenues have been reduced but that doesn't stop the CBI from printing more dinar. All that gold and USD in the reserves are just being converted to dinar.

Caz is not a numbers person , he has faith in the RV.

[Antietam]

Caz doesn't actually believe in the big RV anymore. She just posts her usual blatherings to feel important. Caz has NEVER explained a pathway to the 100,000% RV that everyone dreams of. She just puts down anyone who questions the validity of such a possibility. That is why I hold strong suspicion as to her shill-like postings. Always the guard dog, but without any answers. Very shill-like indeed. Go sell it somewhere else, caz. Down here we provide FACTS, not fiction.

[SocalDinar]

I don't mean to make you look stupid Bot but 82,679 billion is

82 trillion 679 billion.

Edited March 6, 2016 by SocalDinar

[SocalDinar]

So now that you know the M2 is over 82 trillion dinar does it change your opinion in the slightest about the IQD.

The money supply just got 1000 times larger than you thought it was.

[Texstorm]

It's only money folks.....fiat money....monopoly money ! and as soon as the USA and it's accomplices recognize the dinar as an international  trade-able currency, it's game over and the dinar will gain strength. That's all that is really needed with fiat money !b GM DV ! GO RV !

[Antietam]

Wait a minute, SD. Not so fast there. Ole Botswana called us lobsters "jackasses" after he couldn't even interpret iraq's M2 money charts. I think an APOLOGY is in order Bots. YOU misread the M2 charts and then had the audacity to call us "jackasses"? You must be new to the dinar thing. We veterans ALL know the M2 is around 85-90 TRILLION DINARS for years now. We've debated that ridiculously high number as to its effect on an RV for YEARS! So do us all a favor, and get caught up on your facts before posting and calling us veterans "jackasses". Otherwise it just makes YOU look like one!

[SocalDinar]

I too was going to mention the Jackass remark Antietam.  But I really don't care what names I'm called by an anonymous person on a message board. Does not matter to me at all.

What  I never realized is that some misread the CBI statistics and read it as the M-2 as only being 82 Billion dinar.  With the Foreign reserves at 63 Billion USD ( Maybe less ) I can understand why they believe in some type of Revaluation

Unfortunately it is 82 + Trillion dinars that the CBI must account for..

[Antietam]

Wait a minute, SD. Not so fast there. Ole Botswana called us lobsters "jackasses" after he couldn't even interpret iraq's M2 money charts. I think an APOLOGY is in order Bots. YOU misread the M2 charts and then had the audacity to call us "jackasses"? You must be new to the dinar thing. We veterans ALL know the M2 is around 85-90 TRILLION DINARS for years now. We've debated that ridiculously high number as to its effect on an RV for YEARS! So do us all a favor, and get caught up on your facts before posting and calling us veterans "jackasses". Otherwise it just makes YOU look like one!

[Antietam]

SD, Everybody knows the M2 is 85-90 TRILLION dinar ( except Botswana, I guess). What burns my butt is his arrogance. Most of his posts are as virulent as caz's. Always anti-lobster. He once said if the dinar didn't RV he would be financially ruined ( he posted this back in October I think). Well, here we are in March, and the dinar certainly hasn't RVed. In fact since Botswana posted that, the dinar has DEVALUED! I hope Bots didn't get ruined, but I am not going to just roll over when we get called names by j........sses!

[SocalDinar]

I do get it Antietam. I hate the name calling too.   But I let other members responses get me upset before and that's just what they are trying to do so now I just ignore them. I have to deal with people like this every day and I actually feel sorry for them.

They are not worth my time and I just don't want to sink to their level.

I agree that most here know that the M-2 is 82 Trillion dollars.

[SocalDinar]

Cant argue with your math Botzwana.

But Where I went to school Eighty two thousand billion equaled Eighty two trillion.

 

This is actually one of the reasons Former CBI governor Shabibi wanted to delete the three zeroes from the notes. To many simple math errors with all the extra zeros.

[SocalDinar]

No Worries Botzwana.

I hope you get wealthy off of this. I hope my friends and family I talked into this also make some money off of this.

But no one has been able to explain how they could do this and why the world would accept it.

I totally understand that's its a Fiat Currency and only has value because the Government says so.

But how could they turn $70 Billion USD worth of dinar into being worth  $276 Trillion USD. overnight  That's over 22 times the value of our entire M-2.

Thats the million dinar question that no one seems to really be able to answer without talking miracles or conspiracies.

Don't get me wrong i bought into this hook line and sinker but over time it''s the math that puzzled me and caused me to question this endeavor

I may be naive but I just don't see the Federal reserve saying OK if you say its worth $3.00 it must be worth $3.00. Does this sound feasible to you?

Maybe if they get their S%&t together and they start to produce something besides oil ,  Maybe get a handle on the corruption,  overthrow and rid the country of Daesh , create a better  work ethic and oil rebounds back to where it was two years ago the dinar could slowly  increase the value over time.

Edited March 6, 2016 by SocalDinar