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The Minister Of Finance Warns ... Iraq May Withdraw From OPEC


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The Minister Of Finance Warns ... Iraq May Withdraw From OPEC

Allawi: Either reduce spending or declare bankruptcy

 

The Minister of Finance, Ali Abdul-Amir Allawi, specified two things that would happen in the event that oil prices did not rise or public spending was pressured, while stressing that OPEC's plan to reduce oil production was close to reaching an unbearable stage and suggested that Iraq might leave the system.

 

Allawi said in a statement to the British newspaper, The Guardian, followed by the "Independent" today, Thursday, that "the economy of Iraq is riven by corruption to a large extent, to the extent that the exchange of secondary job sites at a border police station costs an amount that may reach 100,000 dollars or more."

Regarding the efforts made by the government to introduce reforms, Allawi said that "there are no quick achievements," indicating "the possibility that the economy will remain in a long latent crisis unless the price of oil reaches $ 70 a barrel and for a continuous period." The country is dwindling in resources.

Allawi pointed out that "what reached the Iraqi treasury of the annual border crossings' dues of 8 billion dollars, is only one tenth of them, in contrast to Jordan, which receives 97% of the imports of its crossings."

Corruption eats away at border crossings 

He pointed out that "the border outposts are so fraught with corruption that the handing over of the job of a secondary clerk to another at some outposts may take place for between 50,000 and 100,000 dollars, and sometimes the amount increases many times that."

According to the British newspaper, "Allawi likened the situation of Iraq, as it is at the arrival of the dry season, to a pool of water in Africa, by saying: Where the fish becomes frenzied because of the low levels of oxygen ... Many of these people do not know how to extract a wage from this dwindling pond."

 

Allawi continued, saying, "If we assume that oil prices will not rise, one of the two things is bound to happen .. Either we follow the Venezuelan approach and our economy becomes oil-based, which leads us to bankruptcy, or we tighten our belts."

Option to tighten belts

The minister went on to say, "No one will go to the option of tightening the belts, but there is a subconscious acknowledgment of the need to make a change," indicating that "the current rates of public spending cannot remain the same."

The Deputy Prime Minister added: "I would like to say that at a certain stage it requires someone to say no, and I think it is out of my responsibility to say no, but at a certain point you can say, no, only and then they will respond to you with the word no." .

He explained, "Many of the country's problems are in a thorny situation, and wherever there is a problem that requires a solution, there is a vested interest in it. Sometimes that interest is so strong that it stands as a stumbling block to the solution."

Iraq’s withdrawal from OPEC

Allawi added, "Iraq’s acceptance of OPEC’s plan to reduce production without taking the organization into consideration of the economic and political conditions of the member states. It is close to reaching an unbearable stage, and hinting that Iraq might leave the system."

In his dialogue on the role of US forces in Iraq, Allawi said, "What is related to the importance of the American presence, it has shifted from being a fundamental factor for stability to being a formal presence to some extent."

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 2020-11-26 01:14
 

Shafaq News / Deputy Prime Minister Ali Allawi criticized OPEC, just days before the organization made a decisive decision on increasing production .

 

This week, Allawi said during a hypothetical conference hosted by the "Chatham House" think tank in the United Kingdom that OPEC should take the economic and political conditions of members into consideration when determining production quotas instead of adopting a "one size fits all " approach.

 

He added, "We have reached the limit of our ability and our willingness to accept a one-size-fits-all policy, stressing that it" must be more accurate and must be related to per capita income and the existence of sovereign wealth funds, which we do not have any of them. " We have begun to clarify this position . "

 

According to Bloomberg, Allawi said that he was not speaking on behalf of the Oil Ministry, which is making a decision on OPEC affairs. His comments are another manifestation of disagreements within the organization before its next meeting on November 30, and officials in the United Arab Emirates have spoken in particular, and they said They are reaping the benefits of leaving OPEC, while Nigeria has tried to exclude some types of oil from its quota .

 

Iraq, the group's largest producer after Saudi Arabia, is suffering from the collapse in oil prices caused by the Corona virus, as is the case for the rest of all members, but Iraq's position is the worst, as the government struggles to pay the salaries of teachers and civil servants, and protesters have taken to the streets in large numbers .

 

OPEC +, an alliance between the Organization of the Petroleum Exporting Countries and others like Russia, meets a day later, on December 1, and in April, at the height of the epidemic, agreed to cut crude production by 10 million barrels per day.

 

OPEC imposed quotas on 10 of its 13 members, exempting Iran, Libya and Venezuela due to economic and political turmoil .

 

OPEC + eased some of those restrictions in August. The cuts were supposed to be cut by another 2 million barrels per day at the beginning of January, but renewed shutdowns in major economies including the United States and Europe mean some members may push for a delay .

 

 

 

Brent crude prices have more than doubled since April, but are still down about 26% this year at $ 48.50 a barrel .

 

Iraq has already violated its quota on several occasions, to the ire of de facto OPEC leader, Saudi Arabia. It promised to compensate for the surplus production. This week, in an unprecedented move, Iraq sought a down payment of nearly two billion dollars for a long-term crude supply contract.

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 2020-11-26 01:14
 

Shafaq News / Deputy Prime Minister Ali Allawi criticized OPEC, just days before the organization made a decisive decision on increasing production .

 

This week, Allawi said during a hypothetical conference hosted by the "Chatham House" think tank in the United Kingdom that OPEC should take the economic and political conditions of members into consideration when determining production quotas instead of adopting a "one size fits all " approach.

 

He added, "We have reached the limit of our ability and our willingness to accept a one-size-fits-all policy, stressing that it" must be more accurate and must be related to per capita income and the existence of sovereign wealth funds, which we do not have any of them. " We have begun to clarify this position . "

 

According to Bloomberg, Allawi said that he was not speaking on behalf of the Oil Ministry, which is making a decision on OPEC affairs. His comments are another manifestation of disagreements within the organization before its next meeting on November 30, and officials in the United Arab Emirates have spoken in particular, and they said They are reaping the benefits of leaving OPEC, while Nigeria has tried to exclude some types of oil from its quota .

 

Iraq, the group's largest producer after Saudi Arabia, is suffering from the collapse in oil prices caused by the Corona virus, as is the case for the rest of all members, but Iraq's position is the worst, as the government struggles to pay the salaries of teachers and civil servants, and protesters have taken to the streets in large numbers .

 

OPEC +, an alliance between the Organization of the Petroleum Exporting Countries and others like Russia, meets a day later, on December 1, and in April, at the height of the epidemic, agreed to cut crude production by 10 million barrels per day.

 

OPEC imposed quotas on 10 of its 13 members, exempting Iran, Libya and Venezuela due to economic and political turmoil .

 

OPEC + eased some of those restrictions in August. The cuts were supposed to be cut by another 2 million barrels per day at the beginning of January, but renewed shutdowns in major economies including the United States and Europe mean some members may push for a delay .

 

 

 

Brent crude prices have more than doubled since April, but are still down about 26% this year at $ 48.50 a barrel .

 

Iraq has already violated its quota on several occasions, to the ire of de facto OPEC leader, Saudi Arabia. It promised to compensate for the surplus production. This week, in an unprecedented move, Iraq sought a down payment of nearly two billion dollars for a long-term crude supply contract.

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 2020-11-26 11:47
 

Shafaq News / The Russian Central Bank said today, Thursday, that the OPEC + group may postpone a planned increase in oil production from January 1, 2021, due to the repercussions of the Corona pandemic, on the economic outlook and demand for crude.

 

OPEC + production is supposed to raise 2 million barrels per day in January - about 2% of global consumption - as it moves to ease record cuts this year, but in light of declining demand, the group is considering delaying the increase.

 

"The deterioration of the economic recovery prospects, and thus the outlook for oil demand, is putting pressure on the oil market," the bank said in a review. In such a situation, OPEC + may take a decision to postpone the planned easing of oil production cuts from January 2021. ”

 

"This may provide support for oil prices, but on the other hand, oil companies will not be able to increase production quantities," he added.

 

Three sources close to OPEC + told Reuters, on Wednesday, that OPEC and its allies, including Russia, tend to postpone the planned increase in oil production next year to support the market in light of the second wave of Covid-19 and the increase in Libyan production, despite the high prices.

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 energy


Economy News _ Baghdad

Saudi Arabia and Russia summoned a small group of OPEC + countries for last-minute talks on Sunday, amid Iraq's complaints, before deciding whether to delay increasing production in January.

According to US Bloomberg Agency, a clear majority of OPEC + observers expect the group to maintain supply restrictions at current levels for a few months longer due to the continuing uncertainty about the strength of demand. However, the decision is by no means certain, amid public complaints from Iraq and Nigeria, and a private row with the United Arab Emirates.

The two key members of the Organization of Petroleum Exporting Countries and its allies, Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Abdulaziz bin Salman, have requested an informal video conference with their counterparts from the Joint Ministerial Monitoring Committee that includes Algeria, Kazakhstan, Iraq, Nigeria and the UAE.


One of the delegates said that the hastily called meeting will be tomorrow, Sunday, and the talks will take place the day before the full OPEC ministerial meeting on November 30, followed by the OPEC + meeting on December 1.

 
 
Number of observations 57,   date of addendum 11/28/2020
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The decline in world oil prices

Saturday 28 November 2020 42

The decline in world oil prices

 
 Capitals: agencies
 
 
Oil prices fell on Friday in quiet trading due to the Thanksgiving holiday in the United States, as they fell amid fears of an increase in supply and doubts about the possibility of eliminating a vaccine against the Corona virus pandemic, and with the closure of the Japanese markets, Brent crude fell a dime a dozen to 47.70 dollars a barrel, after it It lost 1.7 percent overnight.
US West Texas Intermediate crude fell 86 cents, or 1.9 percent, to $ 44.85 a barrel, and both benchmarks were up about 6 percent this week. "Given that much of the oil rally in November was built on expectations, sentiment and quick speculation that were not based on fundamentals, some correction is long overdue," said Jeffrey Haley, chief market analyst at Oanda. Three sources close to OPEC + told Reuters that the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, within the OPEC + group, were inclined to delay the planned increase in oil production next year.
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 2020-11-30 04:25
 

Shafaq News / The oil expert, Hamza Al-Jawahiri, confirmed today, Monday, that the interest of Iraq is while adhering to OPEC's decisions, indicating that the Gulf countries are precisely something that causes harm to Iraq.

Al-Jawahiri said in an interview with Shafaq News; "Iraq is very committed to the decisions of OPEC, regardless of whether it is harmed by the commitment to this mechanism," noting that "if OPEC agreed to extend the reduction, Iraq will be affected the most of the issue."

Al-Jawahiri added that "all OPEC countries have financial resources other than oil and are able to manage their economy without any problems, but Iraq is the only one that depends 100% on oil resources and has financial problems as a result," calling for "adherence to OPEC decisions even if the matter is disturbing to Iraq." ".

Al-Jawahiri emphasized that "Iraq has asked OPEC more than once to take into account its financial conditions as a result of low oil prices, and the United States of America intervened on behalf of Iraq and demanded Saudi Arabia take into account Iraq's financial conditions."

Al-Jawahiri pointed out that, "It is in OPEC +’s interest to extend the production cuts during their meeting today and tomorrow, Tuesday, because the Corona pandemic, which has affected the economies of the world, is not over."

OPEC + is considering during its scheduled meeting, starting from Monday, over two days, to extend oil production cuts for a period of 3 months.

Last April, OPEC + reached an agreement to reduce oil supplies for a period of two years, with the aim of controlling oil markets, whose prices had collapsed due to the decline in demand in the outbreak of the new Corona virus pandemic, the agreement stipulated to reduce production by about 9.7 million barrels per day during the months of May and June. A total reduction of 7.7 million barrels per day in the second half of the year.

Iraq had previously violated its commitment to reduce production and then pledged to reduce its production by one million barrels per day, or one percent of global supplies.

Iraq is the second largest producer of crude oil in the Organization of the Petroleum Exporting Countries (OPEC), and usually exports around 3.5 million barrels per day.

It is noteworthy that Iraq suffers from a stifling financial crisis as a result of low global oil prices, which constitute 90% of Iraq's general budget, and thus the Finance Ministry found itself unable to pay the salaries of employees during the current year, which prompted it to borrow, while it later claimed that it is unable to pay salaries. Employees for the remaining months of the current year without borrowing either.

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The OPEC + group is considering, during its meeting today, Monday and Tuesday, extending the existing oil production cuts for a period of three to four months.

Analysts and traders expect the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia - OPEC + - The planned increase in oil production next year, as the second wave of Covid-19 affected the global demand for fuel.

 
 


OPEC + previously agreed to increase production by 2 million barrels per day in January, or about 2% of global consumption, after record supply cuts this year.

OPEC + will hold a meeting at 13:00 GMT to extend the reduction of oil production for a period of three or four months, in addition to a gradual increase in production, starting from January, as main scenarios during its two-day meeting that begins today, Monday.



The oil market surplus is expected to reach 1.5 million to 3 million barrels per day in the first half of 2021 if OPEC + cuts are not extended and thus will have a significant impact on oil prices that may slide to less than zero, as we saw in the US oil shipments in April. the past.

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OPEC raises the wait sign to agree to a policy of production cuts in 2021

 


Find agreement with producers outside the organization during tomorrow's meeting

Ghalib Darwish is a journalist @ gdarwish1 
Monday 30 November 2020 22:22
    

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Oil producers tend to agree to a policy of production cuts in 2021 (Reuters)

 

 

Ministers of the Organization of Petroleum Exporting Countries (OPEC) concluded a meeting to discuss whether they would extend existing cuts to oil production for a period of three to four months, or gradually increase production from January according to the OPEC + agreement in light of the continuing decline Fuel demand. 

OPEC decided to wait until tomorrow's meeting to reach consensus with non-member states on the policy of production cuts in 2021, according to informed sources. 

Officials from the "OPEC +" alliance, in informal talks yesterday, did not reach an agreement on the production policy for 2021.

According to the current agreement, OPEC + will reduce existing production cuts by two million barrels per day from January 2021, but the second wave of Corona has reduced the demand for fuel around the world, which caused a rethink of the issue among the members of the group.

 

Extension of the agreement 

Abdel Majid Attar, Algerian Minister of Energy and head of the current OPEC conference, confirmed that there is consensus at the organization’s level on the need to extend the ceiling of OPEC + production cuts by 7.7 million barrels per day until the end of March 2021.

In statements he made to the Algerian state television, Attar indicated that some countries have reservations about the proposal to extend the current ceiling to reduce production, but he expressed his optimism that it will be adopted by all OIC countries. He also appeared confident that OPEC + countries would adopt the decision to extend production cuts during the meeting scheduled for tomorrow, Tuesday.

In his speech during the meeting, Attar said, "The year 2020 is still full of enormous challenges resulting from the (Covid-19) pandemic, which continues to negatively affect the global economy, and thus the global energy markets in an unprecedented way."

He added that world leaders still recognized the positive contributions of the OPEC + cooperation agreement.

Attar explained that the world leaders emphasized the urgent need for stable and uninterrupted energy supplies to support economic recovery and achieve a safe, sustainable and inclusive energy future. 

He stated that the shock to the oil industry is enormous, and is likely to reverberate in the coming years, as the global economy remains in a deep recession with a steady contraction of 4.3 percent for 2020.

Attar indicated that global oil demand for 2020 is expected to decrease by about 9.8 million barrels per day, as the second wave of the epidemic and related closures impeded demand.

 


He pointed out that the markets have responded positively in recent days, as many pharmaceutical companies have made positive steps in developing and adopting a safe and effective vaccine for the "Covid-19" virus, and its impact is likely to begin to appear significantly in the second half of 2021.

A long way 

"The road to recovery is long and difficult and requires great patience. However, there are light signals at the end of the tunnel, and next year the global economy is expected to return to growth and expand by an estimated 4.4 percent, and oil demand growth is expected," Attar said. Rising in the range of 6.1 million barrels per day, and this brighter outlook for 2021 gives us cautious optimism and a clear indication that we are on the right path.

He emphasized that OPEC continues to support the global oil market in cooperation with its partner countries in the declaration of cooperation, and it is now in its fourth year, indicating that when the agreement was signed in December 2016, no one could imagine that the agreement would last for 4 years. Not to mention that they are useful in dealing with the biggest crisis the oil market has faced since World War II.

"Our joint efforts, through the largest and longest production adjustment in history, continue to provide a vital basis for stability in the market at a critical moment in history," he said.

Kazakh opposition 

Prior to the start of the meeting, comments made by Kazakhstan, a close ally of Russia, showed that it was against extending the cuts. A source in the government of Kazakhstan told Reuters: “We are not against finding consensus.

The Russian news agency TASS reported that the Cabinet of Kazakhstan proposes to ease production restrictions in the first quarter of 2021.

The cuts are forcing Kazakhstan to reduce its total production of oil and gas condensate to an estimated 85.6 million tons from 90.5 million tons last year, while Iranian Oil Minister Bijan Zanganeh expected a difficult meeting of "OPEC" due to differences of opinion on whether to extend Production cuts are in place from January, when OPEC was to start increasing production.

In a press statement before the start of the meeting, the minister said, "Some members have different views. This will make it difficult." Iran is exempt from the (OPEC +) cuts. " 

Difficulties facing oil prices 

According to a poll conducted by "Reuters", that oil prices will face difficulties in order to gain an upward momentum next year as demand continues to be subject to the Coronavirus pandemic, despite the growth of optimism about vaccines and the possible extension of production cuts by major producers.

The poll, which included 40 economists and analysts, expected the average price of Brent crude to reach $ 49.35 per barrel next year, unchanged from last month’s forecast of $ 49.76. The average was about $ 42.50 a barrel since the beginning of 2020.

Analysts said that the rise in Libyan production was also an opposite factor, with the market’s focus on the strategy to be decided by the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, in a group known as “OPEC +,” during their meeting today and tomorrow. 

Although the accelerating Covid-19 vaccine race has raised hopes for a faster economic recovery, analysts said that the stimulus from demand will likely not materialize before the second half of 2021.

China is expected to lead the growth in global demand next year, by between 5.1 million and 6.3 million barrels per day. 

The poll predicted that US West Texas Intermediate crude futures will average $ 46.40 a barrel in 2021, compared to $ 46.03 in October.

Prior to the meeting, a government source announced that Kazakhstan is ready to reach an agreement with the rest of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries on the future of the current oil production cuts.

High production 

While a recent survey showed that OPEC oil production rose for the fifth month in a row in November, the increase in Libyan production compensated for full compliance by other producers with cuts required by an OPEC-led supply deal.

The survey concluded that the 13-member Organization of the Petroleum Exporting Countries (OPEC) pumped 25.31 million barrels per day in November, up 750,000 barrels per day in October, a further increase from the lowest level in three decades recorded in June.

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OPEC and Russia agree to boost production in 2021

The agreement follows recent increases in global oil prices. The COVID-19 pandemic has hurt oil markets and, subsequently, the economies of several Middle Eastern states.

 
 
 
 
 
al-monitor Journalists stand in front of the entrance to the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) where a meeting of OPEC members and non-OPEC members in Vienna, Austria, takes place on Dec. 7, 2018. Photo by JOE KLAMAR/AFP via Getty Images).

Dec 3, 2020

Middle Eastern oil producers agreed to boost production on Thursday as global prices continue to increase toward their pre-pandemic levels.

The Organization of the Petroleum Exporting Countries (OPEC) and Russia agreed to boost their output by 500,000 barrels per day starting in January 2021, the financial news site CNBC reported.

Saudi Arabia is the largest oil producer in OPEC. Iran, Iraq and several other Middle Eastern and African states are also members, as is Venezuela. When OPEC and Russia work together, they refer to themselves as OPEC+.

Global oil prices have fallen dramatically this year amid the COVID-19 pandemic, and this has negatively affected Middle Eastern economies. The price of Brent crude, which is a global benchmark for oil prices, started 2020 at more than $65 a barrel but plummeted to less than $25 a barrel in March. Oil prices also went down following a price war between Saudi Arabia and Russia in March that led to a glutton of supply. Prices have consistently gone up since late October and are now at $48 a barrel, according to the financial news site Markets Insider.

The production boost by OPEC+ followed the recent price recovery.

OPEC+ previously agreed to cuts of 7.7 million barrels per day. In January, the cut will be 7.2 million per day, according to CNBC. OPEC produced 35.6 million barrels per day in 2019, according to the market data company Statista.

The group of oil producers has met regularly throughout 2020 in an attempt to keep prices up. In September, OPEC+ pressured Iraq and the United Arab Emirates to further cut production to this end. OPEC+ decided to meet every month to discuss production levels from January onward, Reuters reported.

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