The collapsed economy in Iraq turns into a threat to OPEC

[yota691]

The collapsed economy in Iraq turns into a threat to OPEC

 

Reports Economy News _ Baghdad From his office on the third floor in eastern Baghdad, Iraqi Oil Minister Ihsan Abdul-Jabbar can see the loud protesters below as they march toward Tahrir Square, the symbolic heart of the recent Iraqi uprising. On Sunday, thousands of Iraqis gathered again carrying national flags in the square, across the Tigris River from the heavily fortified Green Zone, where its US embassy is located. Their list of grievances was long: corrupt politicians, daily power cuts, dilapidated hospitals, dilapidated roads, and a shortage of jobs.   Iraq may be the world's third-largest oil exporter, but its economy is collapsing after the coronavirus pandemic depleted global energy demand and caused prices to collapse. The state finances are so dire that it cannot pay the salaries of teachers and civil servants on time, threatening to repeat the unrest that brought down the government last year and saw hundreds of protesters killed.   This created a dilemma for the 46-year-old Abdul-Jabbar, a chemical engineer and professional oil man, who is now caught between the demands of angry residents and the pledges made to allies in OPEC. The oil producer cartel is trying to boost the fragile market by holding back supplies and major producers such as Iraq need to stick to the line. For Iraq, restricting supplies carries an enormous economic - and political - cost. But breaking the ranks is also risky: it could mean lower prices for everyone.   Some Iraqis want the government to put them first simply by pumping more oil, a move that could dismantle a carefully calibrated production agreement; If an important product like Iraq violated the agreement, there wouldn't be much to stop small businesses from doing the same.   "I waited more than 45 days to get my monthly salary," said Ziad Al-Mustansir, 44, a high school teacher in Baghdad, according to Bloomberg. The government should have taken care of the country's interests when it came to OPEC. If such deals mean losses for the country, we should not go with it. ”   Under an agreement reached in April between Iraq and other members of OPEC +, a group affiliated with the Organization of the Petroleum Exporting Countries and countries like Russia, Baghdad had to reduce its daily production by about 1 million barrels - roughly $ 40 million worth - to 3.6 million.   The idea was that cutting supply would raise crude prices enough to compensate for lost exports. While prices have more than doubled since the agreement to $ 40 a barrel, they are still down nearly 40% this year, and are at levels well below what Iraq needs to fund its budget. The government's monthly revenue of $ 3 billion is less than half of what it was last year.   Iraq has already violated its production limits on several occasions and angered the de facto leaders of OPEC +, Saudi Arabia and Russia. The risk for them is if Baghdad starts pushing more barrels to the market to get every other dollar it can.   Iraqi officials have repeatedly said that they are committed to the agreement, that they are pumping in one line and will compensate for the excess production. However, after previous breakouts, traders are closely watching for signs of a cap crossed again.   "It will become difficult for OPEC + to maintain discipline as countries, especially Iraq, become more desperate," said Tariq Fadlallah, CEO of Nomura Asset Management Middle East.   All countries in OPEC + have been shocked by the oil collapse. The Russian ruble has lost nearly a fifth of its value, Saudi Arabia has tripled its value-added tax to compensate for dwindling oil income, and more than 60 people have died this month during protests in Nigeria.   But Iraq, where oil accounts for nearly all government revenue, is in nearly the worst position. Its GDP will shrink by 12% this year, more than any other OPEC member under a production quota, according to IMF projections.

Number of observations 29   Date of addendum 10/28/2020

[yota691]

The collapsed economy in Iraq turns into a threat to OPEC

Economie

2020-10-28 | 06:38

 

 

3,672 Views

 

From his office on the third floor in eastern Baghdad, Iraqi Oil Minister Ihsan Abdul-Jabbar can see the loud protesters below as they march toward Tahrir Square, the symbolic heart of the recent Iraqi uprising.

On Sunday, thousands of Iraqis gathered again carrying national flags in the square, across the Tigris River from the heavily fortified Green Zone, where its US embassy is located. Their list of grievances was long: corrupt politicians, daily power cuts, dilapidated hospitals, dilapidated roads, and a shortage of jobs.

 

 

Iraq may be the world's third-largest oil exporter, but its economy is collapsing after the coronavirus pandemic depleted global energy demand and caused prices to collapse. The state finances are so dire that it cannot pay teachers and civil servants' salaries on time, threatening to repeat the unrest that brought down the government last year and saw hundreds of protesters killed.

 

This created a dilemma for the 46-year-old Abdul-Jabbar, a chemical engineer and professional oil man, who is now caught between the demands of angry residents and the pledges made to allies in OPEC. The oil producer cartel is trying to boost the fragile market by holding back supplies and major producers such as Iraq need to stick to the line. For Iraq, restricting supplies carries an enormous economic - and political - cost. But breaking the ranks is also risky: it could mean lower prices for everyone.

 

 

Some Iraqis want the government to put them first simply by pumping more oil, a move that could dismantle a carefully calibrated production agreement; If an important product like Iraq violated the agreement, there wouldn't be much to stop small businesses from doing the same.

 

"I waited more than 45 days to get my monthly salary," said Ziad Al-Mustansir, 44, a high school teacher in Baghdad, according to Bloomberg. The government should have taken care of the country's interests when it came to OPEC. If such deals mean losses for the country, we should not go with them. "

 

Under an agreement reached in April between Iraq and other members of OPEC +, a group affiliated with the Organization of the Petroleum Exporting Countries and countries such as Russia, Baghdad had to reduce its daily production by about 1 million barrels - worth nearly $ 40 million - to 3.6 million.

 

The idea was that cutting supply would raise crude prices enough to compensate for lost exports. While prices have more than doubled since the agreement to $ 40 a barrel, they are still down nearly 40% this year, and are at levels well below what Iraq needs to fund its budget. The government's monthly revenue of $ 3 billion is less than half of what it was last year.

 

Iraq has already violated its production limits on several occasions and angered the de facto leaders of OPEC +, Saudi Arabia and Russia. The risk for them is if Baghdad starts pushing more barrels to the market to get every other dollar it can.

 

Iraqi officials have repeatedly said that they are committed to the agreement, that they are pumping in one line and will compensate for the excess production. But after previous breakouts, traders are closely watching for signs of a cap crossed again.

 

"It will become difficult for OPEC + to maintain discipline as countries, especially Iraq, become more desperate," said Tariq Fadlallah, CEO of Nomura Asset Management Middle East.

 

All countries in OPEC + have been shocked by the oil collapse. The Russian ruble has lost nearly a fifth of its value, Saudi Arabia has tripled its value-added tax to compensate for dwindling oil income, and more than 60 people have died this month during protests in Nigeria.

 

But Iraq, where oil accounts for nearly all government revenue, is in nearly the worst position. Its GDP will shrink by 12% this year, more than any other OPEC member under a production quota, according to IMF projections.

[horsesoldier]

So many doom & gloom articles of late. I’d like to think ( dare I go there ) with so much smokey mirrors,  Kazemi Must be getting closer to giving the High Sign to pushing the “ button “ ????

[CSM (R) Thack]

17 minutes ago, horsesoldier said:

So many doom & gloom articles of late. I’d like to think ( dare I go there ) with so much smokey mirrors,  Kazemi Must be getting closer to giving the High Sign to pushing the “ button “ ????

🤞🙏👍🙏👍🙏👍🙏...Hoping and praying!!!👍🇺🇸

[6ly410]

The situation in Iraq threatens "OPEC" .. Saudi Arabia may intervene

Political | 06:37 - 28/10/2020

 

https://www.mawazin.net/Details.aspx?jimare=128179

 

Baghdad - Mawazine News:
Iraq's collapsed economy could turn into a threat to OPEC, which is struggling to maintain oil prices, as some Iraqis want the government to put them first by pumping more oil, a move that could dismantle the OPEC + agreement.
A report by the American "Bloomberg" agency says that in the event that an important product such as Iraq violates the agreement, it is certain that lesser countries will follow suit.
The report indicates that Iraq, the third largest oil exporter in the world, is facing an economic collapse after the Corona pandemic led to a decline in global energy demand and lower prices, causing a financial crisis so terrible that the government is unable to pay the salaries of state employees on time. Which threatens to escalate popular protests.
The report adds that this created a dilemma for Iraqi Oil Minister Ihsan Abdul-Jabbar, who is now caught between the demands of the angry population and the pledges made to allies in OPEC.
The report of the US Agency believes that reducing exports carries a huge economic and political cost for Iraq, and at the same time failure to adhere to the OPEC + agreement may cause a decline in prices and thus a decrease in Iraq's financial imports.
As one of the five founding members of the Organization of Petroleum Exporting Countries, it is unlikely that Iraq would violate the agreement, and if it did, Saudi Arabia, which actively participated in reaching the agreement to reduce production, will retaliate by increasing production and pushing oil prices down, as stated In the report.
The report quotes a person familiar with the matter as saying that Iraqi officials might instead pressure the Saudis to obtain financial aid if crude oil prices remained below $ 45 a barrel during the first half of 2021.
Oil prices in global markets have recently witnessed slight fluctuations, but they have improved dramatically. Notable compared to the first months of the outbreak of the Corona pandemic, where the price of a barrel currently ranges between 42 and 45 dollars compared to less than 20 dollars last April.
The decline in oil revenues is a disaster for Iraq, as it relies on oil resources to finance more than 90 percent of the country's budget.
Iraq needs about 4.5 billion dollars to pay salaries and pensions and secure its government expenses.

The government sector bears the greatest responsibility for securing job opportunities in Iraq, and the government pays the salaries of more than four million people in addition to pensions and social aid for approximately the same number.
And the oil-producing countries decided last April to reduce their joint production by 9.7 million barrels per day for the months of May and June, then gradually reduce these cuts, so that OPEC + members are supposed to reduce production to 7.7 million barrels per day as of August 1 and then 5.8 million barrels as of January 2021. Ended 29 / h

[jake21]

Who the hell knows anymore

[KDuesing]

7 hours ago, yota691 said:

 Their list of grievances was long: corrupt politicians, daily power cuts, dilapidated hospitals, dilapidated roads, and a shortage of jobs.

Sounds like they need a lot of money to rebuild and they cant even pay salaries.

 

7 hours ago, yota691 said:

The government's monthly revenue of $ 3 billion is less than half of what it was last year.

So they might receive 36 billion this year from oil.

 

I don't really know where I'm going with all this but these caught my eye.

[Laid Back]

Diversification of the economy is the answer.

- Private sector

- industrial sector 

- agricultural sector 
- Tourism sector
- Customs and taxation 
 

Maximizing non oil revenue.!

 

Go iraq

Go diversification of the economy 

Go open market economy 

["Fred"]

1 hour ago, jake21 said:

Who the hell knows anymore

If anyones selling out keep me in mind I’m stock piling more 🙂

[yota691]

 

The situation in Iraq threatens OPEC ... and Saudi Arabia may intervene to "take revenge."

 

 2020-10-28 13:36

Shafaq News / Iraq's collapsed economy could turn into a threat to OPEC, which is struggling to maintain oil prices, as some Iraqis want the government to put them first by pumping more oil, a step that could dismantle the OPEC + agreement.

A report by the American "Bloomberg" agency says that in the event that an important product such as Iraq violates the agreement, it is certain that inferior countries will follow suit.

The report indicates that Iraq, the third largest oil exporter in the world, is facing an economic collapse after the Corona pandemic led to a decline in global energy demand and lower prices, causing a financial crisis so terrible that the government is unable to pay the salaries of state employees on time. Which threatens to escalate popular protests.

The report adds that this created a dilemma for Iraqi Oil Minister Ihsan Abdul-Jabbar, who is now caught between the demands of the angry population and the pledges made to allies in OPEC. 

The report of the US Agency believes that reducing exports carries a huge economic and political cost for Iraq, and at the same time failure to adhere to the OPEC + agreement may cause a decline in prices and thus a decrease in Iraq's financial imports.

As one of the five founding members of the Organization of Petroleum Exporting Countries, it is unlikely that Iraq would violate the agreement, and in the event that it did, Saudi Arabia, which actively participated in reaching the agreement to reduce production, will retaliate by increasing production and pushing oil prices down, according to the aforementioned. In the report.

The report quotes a person familiar with the matter as saying that Iraqi officials might instead pressure the Saudis to obtain financial aid if crude oil prices remained below $ 45 a barrel during the first half of 2021.

Oil prices in global markets have recently witnessed slight fluctuations, but they have improved significantly compared to the first months of the outbreak of the Corona pandemic, as the price of a barrel is currently between $ 42 and $ 45, compared to less than $ 20 last April.

The decline in oil revenues is a disaster for Iraq, as it relies on oil resources to finance more than 90 percent of the country's budget.

Iraq needs about 4.5 billion dollars to pay salaries and pensions and secure its government expenses.

The government sector bears the greatest responsibility for securing job opportunities in Iraq, and the government pays the salaries of more than four million people in addition to pensions and social aid for approximately the same number.

And the oil-producing countries decided last April to reduce their joint production by 9.7 million barrels per day for the months of May and June, then gradually reduce these cuts, so that OPEC + members are supposed to reduce production to 7.7 million barrels per day as of August 1 and then 5.8 million barrels as of January 2021.

[Donziman]

For some strange unknown reason we vets choose to recognize that a strong

and prosperous economy will raise the value of the currency to combat inflation

not the situation in Iraq... sorry..imho  

[yota691]

Iraq's economy threatens to collapse the OPEC agreement, and Saudi Arabia is waiting

•  Time: 10/28/2020 19:00:02
•  
•  Read: 6,006 times

  

{International: Al Furat News} Iraq's collapsed economy could turn into a threat to OPEC, which is struggling to maintain oil prices, as some Iraqis want the government to put them first by pumping more oil, a move that could dismantle the OPEC agreement +.

A report by the American "Bloomberg" agency says that in the event that an important product such as Iraq violates the agreement, it is certain that lesser countries will follow suit.
The report indicates that Iraq, the third largest oil exporter in the world, is facing an economic collapse after the Corona pandemic led to a decline in global energy demand and lower prices, causing a financial crisis so terrible that the government is unable to pay the salaries of state employees on time. Which threatens to escalate popular protests.
The report adds that this created a dilemma for Oil Minister Ihsan Abdul-Jabbar, who is now stuck between the demands of the angry population and the pledges made to allies in OPEC. 
The report of the US Agency believes that reducing exports carries a huge economic and political cost for Iraq, and at the same time failure to adhere to the OPEC + agreement may cause a decline in prices and thus a decrease in Iraq's financial imports.
As one of the five founding members of the Organization of Petroleum Exporting Countries, it is unlikely that Iraq would violate the agreement, and if it did, Saudi Arabia, which actively participated in reaching the agreement to reduce production, will retaliate by increasing production and pushing oil prices down, according to what was mentioned In the report.
The report quotes a person familiar with the matter as saying that Iraqi officials might instead pressure the Saudis to obtain financial aid if crude oil prices remained below $ 45 a barrel during the first half of 2021.
Oil prices in global markets have recently witnessed slight fluctuations, but they have improved dramatically. Noticeable compared to the first months of the outbreak of the Corona pandemic, where the price of a barrel currently ranges between 42 and 45 dollars, compared to less than 20 dollars last April.
The decline in oil revenues is a disaster for Iraq, as it relies on oil resources to finance more than 90 percent of the country's budget.
Iraq needs about 4.5 billion dollars to pay salaries and pensions and secure its government expenses.
The government sector bears the greatest responsibility for securing job opportunities in Iraq, and the government pays the salaries of more than four million people in addition to pensions and social aid for approximately the same number.
And the oil-producing countries decided last April to reduce their joint production by 9.7 million barrels per day for the months of May and June, then gradually reduce these cuts, so that OPEC + members are supposed to reduce production to 7.7 million barrels per day as of August 1, then 5.8 million barrels as of August January 2021.
Ammar Al-Masoudi