Friday Evening Iraq Economic News Highlights 9-2-22
Friday Evening Iraq Economic News Highlights 9-2-22
Oil Confirms The Sale Of Super Gasoline Will Not Affect The Availability Of Normal And Improved[/Size]
Economie| 09:38 - 01/09/2022 Baghdad - Mawazine News Today, Thursday, the Ministry of Oil confirmed the sale of more than 100,000 liters of super gasoline during the past 24 hours, after starting its official sale.
The Associate Director General of the Oil Products Distribution Company, Ihsan Musa Ghanem, said, "ISIS terrorist gangs targeted the Baiji refinery in June 2014, and this refinery was preparing the country with (60-65%) of the total need of oil derivatives, and this forced Iraq to import part of it to dam shortage of local need.
He added, "We hope, after the completion of the Karbala refinery project at the end of this year, that the country will be equipped with 9 million liters per day of high-purity super gasoline within the specifications of (Euro-5), 6 million liters of gas oil (kerosene) and two million liters of white oil."
He added, "Unfortunately, there are continuous smuggling operations of at least 7 million liters of gasoline and 5 million liters of kerosene for the more expensive areas," noting that "the cost of subsidizing oil products sold to citizens annually amounts to 3 trillion dinars, and the citizen deserves support."
Regarding the super gasoline file, he explained that “the ministry is currently importing it at a cost of 1400 dinars per liter and selling it to citizens at a price of 1,000 dinars, as it is covered by subsidies, and since seven o’clock yesterday, stations selling this type of gasoline have been opened and more than 100,000 liters have been sold, and in the event of an increase in demand more than We will open two stations on the Karkh side and the same on the Rusafa side, and currently in every governorate there is a station for selling super gasoline.”
He stressed that "there are no intentions to stop the sale of improved gasoline, and the presence of the supercharger will not affect the availability of the remaining two types, whose prices are 650 dinars per liter for the improved and 450 dinars per liter for the regular." https://www.mawazin.net/Details.aspx?jimare=204227
Iraq On The Corner Of “Silk” .. Oil In Exchange For Construction Under The Abdul Mahdi Agreement
Posted On2022-09-02 By Sotaliraq The Chinese agreement opened the door wide for Beijing to flow into sectors of the Iraqi economy, a move that caused Western fears that Baghdad would become a hostage to the Chinese dragon, like many capitals of emerging Asian countries that were plunged into several economic crises due to their absolute dependence on Chinese investments.
Unlike the West, Beijing provides generous aid to Iraq without imposing political conditions on Iraqi leaders, such as achieving more democracy or pursuing structural reform policies for the local economy, so cooperation with China appears more attractive.
In October 2019, the then Prime Minister of Iraq, Adel Abdul-Mahdi, signed an agreement with China that activated the “oil for reconstruction” program, in which dozens of Chinese companies pledged to work in Iraqi infrastructure in exchange for Beijing receiving 100,000 barrels of oil per day.
This revived another old agreement signed by Abdul-Mahdi also with Beijing in 2015. He held the same principles, but at the time he was Minister of Oil during the era of Prime Minister Haider al-Abadi, after Iraq agreed to engage in the Chinese “Belt and Road” initiative in exchange for signing the “Oil for Reconstruction” agreement, which Its provisions included allowing Chinese companies to invest heavily in all of Iraq's economic joints in return for providing China with a specified number of barrels of oil.
The “2015 agreement” was not implemented due to the political tensions that Iraq experienced, and as a result of which governments were subjected to successive ministerial changes that froze the “China deal” until Abdul Mahdi took the helm and revived it again.
Under the new agreement, Chinese companies will build 1,000 schools in Iraq - with a pledge to explore building another 7,000 in the future - and work has begun to build an airport in Nasiriyah, 90,000 homes in Sadr City and 1,000 medical facilities, as well as implementing a comprehensive sanitation improvement process. In Baghdad and building a “science city” in northern Iraq that will include a huge university, research laboratories and public parks, unlike dozens of other projects in Iraqi infrastructure implemented by Chinese companies with funding from Chinese banks.
US Withdrawal
These steps come at a time when the United States is reducing its presence in the country, after announcing the end of its “combat missions” in Iraq, and diverting the remaining roles of its soldiers (2,500 American soldiers, and a thousand other coalition soldiers) to advisory missions, which reflects the pursuit of Beijing is quick to fill any void that the United States may leave in Iraq.
On the economic level as well, many Western oil companies have begun to reduce their presence in Iraq due to the country being considered a “risky investment environment” and the spread of corruption in the country, most notably the exit of the American oil company ExxonMobil from the “West Qurna 2” oil field despite official government appeals. her not to do so.
The British "BP" intends to take a similar step with its investments in the "Rumeil" field, the largest oil field in Iraq.
As a result of these steps, Chinese companies do not stop acquiring concessions from Iraq's oil fields one by one.
After ISIS
Iraq succeeded in ending the control of ISIS over large parts of its territory, but, despite the victory, the price was heavy: the country's infrastructure collapsed, and Iraq needed 88 billion dollars to rebuild its dilapidated infrastructure, according to estimates by World Bank experts.
On the other hand, Beijing's hunger for energy does not stop, which has put it on the throne of the country most in demand for oil in the world, so it does not stop making deals that secure oil right and left: with Iran, Saudi Arabia and finally Iraq, which China set as a main target immediately after the fall of Hussein's system. In 2010, 80% of Iraq's debts, amounting to 8.5 billion dollars, were written off at the time, in exchange for "strengthening economic cooperation between the two countries."
This step had its effect and Chinese companies began to penetrate Iraq little by little: in 2018, China imported 27% of Iraq's total oil, and thus China paid $22 billion out of the total 83 billion that Iraq earned that year as a result of selling its oil to countries around the world.
On the corner of silk
In 2013, Chinese President Xi Jinping announced the "Belt and Road" initiative, which he considered to be the new Silk Road in this era, in reference to the complex network of roads used by Chinese tribes in the past to sell their goods around the world.
Iraq occupies a cornerstone of this initiative. Therefore, Beijing is interested in developing its relationship with Baghdad so that it becomes a cornerstone in its commercial communication between the countries of the Middle East and the rest of the countries that fall within the scope of the Chinese initiative, which amounts to 125 countries, according to what Beijing announced.
Iraq, which has the fifth largest oil reserves in the world, and a strategic geographic location in the heart of the Middle East, is considered by China as its cornerstone to control trade across Europe and Asia, in addition to its ability to play the role of a “shipping corridor” to transport its goods to other countries in the Gulf, Turkey or Israel as well as to Syria and Lebanon.
And for the historical irony, Iraq in ancient times played a key role in the Chinese trade route, which enjoyed great support from the “Han” dynasty of the Chinese empire thanks to the close relations that developed between China and the Arabs since ancient times.
Kurdistan
As for the Kurdistan Region, China's ambition to expand into Iraq does not depend only on dealing with Baghdad, but Beijing has also shown an interest in being present within the autonomous region within the state.
In 2014, Beijing opened a consulate in Erbil, a move that Chinese Vice Foreign Minister Zhang Ming justified by his country's desire to strengthen "bilateral relations with Iraq and the Kurdistan Region in various fields."
During the Corona pandemic, Beijing provided the Kurdish region with huge aids of masks, sterilizers, and medical supplies, and just last year, the two parties signed an agreement worth billions of dollars to build dozens of mega projects in Erbil in the fields of cement, housing, tourism and commercial centers.
In August last year, Qingsheng, the Chinese commercial consul in Erbil, said the region had become a "gold mine" for foreign investment. LINK
Russia Is Ready To Help Iraq In The Peaceful Use Of Nuclear Energy
Political | 10:04 - 02/09/2022 Follow-up- Mawazine News Alexander Kinshak, Director of the Middle East and North Africa Department of the Russian Foreign Ministry, said that Russia is ready to supply Iraq with radioisotope products and help Baghdad in the field of nuclear medicine.
Kinshak said, "The Russian side expressed its readiness to assist Iraqi partners in the peaceful use of nuclear energy and the supply of radioisotope products, as well as training cadres in Russian universities specialized in related fields," noting in this context that Russia is also ready "to implement joint projects." big.”
The official in the Russian Foreign Ministry explained, "We proceed from the fact that a return to a practical view of this issue is possible with an increase in the volume of cooperation in this intensive scientific field, and also when updating and revising the relevant plans of Iraqi clients."
Kinshak stated that the two relevant bodies in the two countries, namely the Russian State Corporation Rosatom and the Iraqi Agency for the Control of Radioactive Materials, "are working jointly to modernize the bilateral regulatory framework and sign a memorandum of understanding on cooperation in the peaceful use of atomic energy." Ended 29/N33 https://www.mawazin.net/Details.aspx?jimare=204249
Oil Prices Take A New Blow
Energy Economy News – Baghdad Oil prices fell 3% on Thursday evening, after new closures in China reinforced fears that inflation and higher interest rates could lead to a slowdown in demand for oil.
Brent crude futures fell $1.95, or 3.2%, to $92.64 a barrel, and West Texas Intermediate crude futures fell $2.81, or 2.9%, to $86.84 a barrel.
"Demand for oil in the Western world, as well as in China, is slowing, while supplies are gradually increasing, mainly due to the rise in shale oil production in the United States," said Neubert Rucker, analyst at Julius Baer.
The results of surveys published Thursday showed that factory activity in Asia declined in August, as pressures imposed by Corona restrictions in China and rising costs continued to hit business activities, adding to the bleak outlook for the fragile recovery in the region.
Today, the main index of European markets fell to the lowest level in 7 weeks, which increases fears of a sharp interest rate hike and a record rise in inflation in the region.
Prices are also affected by the prospect of reviving the Iran nuclear deal, which would allow the Organization of the Petroleum Exporting Countries (OPEC) to increase its exports.
46 . views Added 09/01/2022 - 7:31 PM Update 09/02/2022 - 11:44 AM
How Will Stopping Kurdistan's Oil To Turkey Affect The Region's Economy?
2022.09.02 - 09:17 Baghdad - People A Reuters report highlighted the implications if the flow of Kurdistan's oil to Turkey stopped, noting that this would negatively affect the region's economy.
And the agency said in a report followed by "NAS" (September 2, 2022): " Any stop to the flow of oil through the pipeline connecting Iraq and Turkey would lead to the collapse of Kurdistan's economy in addition to pushing Turkey to obtain more crude from Iran and Russia, according to a letter (( HKN) to representatives of the United States.
Neither the Kurdistan Ministry of Natural Resources nor the Oil Ministry in Baghdad responded to a request for comment.
And the pipeline between Iraq and Turkey can pump up to 900,000 barrels per day, representing approximately one percent of the total daily global demand, from both the Iraqi Oil Marketing Company (SOMO) and the government of Iraqi Kurdistan.
However, 500 thousand barrels are being pumped from the fields in northern Iraq, which will find it difficult to increase supplies unless there are new investments.
Analysts expect companies to withdraw from Kurdistan if conditions do not improve. Many foreign companies have already lost interest.
These companies were introduced to Kurdistan during the era of former President Saddam Hussein, when the region was seen as more stable and secure than the rest of Iraq.
As security deteriorated, the few remaining companies, mostly small and medium-sized ones, also sought a US role to help deter attacks on energy infrastructure as well as enhance security in general.
According to people with direct knowledge of the matter, the companies backed letters sent by members of Congress to Secretary of State Anthony Blinken in August. The sources requested anonymity due to the sensitivity of the matter.
The letters demanded high-level consultations between Erbil and Baghdad to secure the stability of Kurdistan and stave off Iranian interference in Iraq.
American Interest Waned
US State Department spokesman Ned Price said on August 16 that the differences between Baghdad and Erbil are differences between the two sides, but that the United States could encourage dialogue.
In July, the US State Department summoned the American legal consultancy firm (Vinson & Elkins), which represents the Iraqi Oil Ministry in Baghdad, to provide a briefing in Washington regarding the dispute over the Iraq-Turkey pipeline. According to an informed source, two more briefings are likely to be given in Baghdad and Washington.
James Loftis, partner in Vinson & Elkins, said, "Baghdad will certainly welcome any US statements by the leadership of Iraqi Kurdistan that it must abide by the Iraqi constitutional measures related to the oil sector in Iraq."
The US State Department declined to comment, but industry experts do not recommend US intervention or rule out that it would work if it did.
"The United States has withdrawn its hand from Iraq over the past decade. Any pressure from Washington or others will not resolve the differences between Baghdad and the Kurds," said Raad al-Qadri, managing director of energy, climate and sustainability at Eurasia Group.
A Kurdish official told Reuters in August that the Kurdistan government had asked the United States to support its defense capabilities, but said it was not counting on that because the United States' top priority is to revive the nuclear deal with Iran. https://www.nasnews.com/view.php?cat=93090