Friday Morning Iraq Economic News Highlights 5-19-23

Iraq's Budget Is On The Security Council Table.. Plasschaert: Its Approval Is Important And Dependence On Oil Must Be Reduced

2023-05-18 Shafaq News/ The UN representative, Jeanine Plasschaert, revealed today, Thursday, that approving the Iraqi general budget is a "necessary and pivotal" matter, while she called for a structural change in Iraq's oil-dependent economy.  "Plasschaert: We are disappointed that the 2020 agreement has not been implemented in Sinjar," the UN representative said during the UN Security Council session.

"The Iraqi government is focused on consolidating the pillars of political stability, and has taken clear positions against corruption," Blaskhart added.

Regarding the budget, the UN envoy indicated that "agreeing to pass it quickly is pivotal and necessary, and its approval would support the provision of appropriate public services and the organization of provincial elections."   And Blaskhart indicated that "Iraq needs a structural change in its economy, which depends on oil."   LINK

Blaskhart: Millions Of Dollars In Losses From Iraq's Revenues Due To The Stoppage Of Oil From Türkiye

2023.05.19 - Baghdad - Nas   The UN representative in Iraq, Jenin Plasschaert, said that stopping oil exports through Turkey exposes Iraq to losses of millions of dollars in imports, while praising the efforts aimed at Iraq's independence in the field of energy, especially gas, in reference to Iran. 

 In her briefing she gave to the United Nations Security Council and followed by “NAS” (May 19, 2023), Blaskhart stated that “on April 4, after the issuance of a ruling by the International Court of Arbitration based in Paris, and given the absence of the long-standing oil and gas law, Waiting for him, Baghdad and Erbil announced that they had reached a temporary agreement that would allow the resumption of oil exports through the Turkish port of Ceyhan.   

  And she indicated, "On May 10, the Iraqi government asked Turkey to allow the resumption of exports. However, it has not resumed so far. Since oil pumping was stopped on March 25, hundreds of millions of dollars in revenue is likely to be lost."   

  She added, “I would like to commend the government's efforts in pushing Iraq closer to energy independence. Again, this will not happen overnight, but through the issuance of new licensing rounds and efforts to reduce energy waste, including reducing gas flaring – This ambitious goal is getting closer and closer.     https://www.nasnews.com/view.php?cat=107559

Al-Mattalabi: Resolving The Government Changes Will Be After The Approval Of The Budget

Information/Baghdad..  The independent politician, Saad Al-Mutalabi, confirmed on Friday that the government changes that Al-Sudani intends to make will be decided after the approval of the budget in Parliament, pointing out that the mechanism of change is still vague and unknown whether Al-Sudani bears responsibility for it or is done through the political blocs.

Al-Muttalbi told Al-Maalouma that, "Prime Minister Muhammad Shia'a Al-Sudani, and in the event that he obtains real support from the blocs in the House of Representatives, he will move towards making changes in positions and ministerial portfolios within his cabinet."

He added, "The government cabinet has been built on the basis of balance, but the difference in it from previous governments lies in the fact that the prime minister persuaded the political blocs to carry out the process of evaluating officials and replacing the negligent ones."

And he indicated that "the way to change officials who fail to perform duties is still unknown, although the change is coming, whether by direct implementation by the Prime Minister or through political blocs, and this matter will take place after approving the budget and passing it in Parliament." LINK

Saudi Arabia: Coordination With OPEC + Enhances Market Stability

Economy  | Baghdad today - follow-up   The Saudi Minister of Energy, Prince Abdulaziz bin Salman, considered coordination with OPEC + countries as a cornerstone of efforts to enhance the stability of oil markets and maintain their balance and security of supplies in a manner that supports the growth opportunities of the global economy.

He also stressed the Kingdom's interest in cooperating with Arab countries in the field of energy, explaining that it is an "integral part" of its interest in strengthening its relations in its Arab depth in all fields.

And Prince Abdulaziz bin Salman indicated that this cooperation is embodied in coordination for joint Arab action, and in many projects, programs and initiatives, according to the Saudi Press Agency.

He explained that the Kingdom signed a number of memorandums of understanding with a number of Arab countries in the energy sector, such as those signed with the Arab Republic of Egypt, the Sultanate of Oman, the Hashemite Kingdom of Jordan, and the Republic of Iraq, which aim to enhance cooperation in the fields of electricity, renewable energy, clean hydrogen, and oil and gas. , petrochemicals, and other fields related to energy.

He also pointed out that there are also electrical interconnection projects between the Kingdom and the Arab countries, as the Kingdom is connected to all the Arab Gulf countries through the Gulf interconnection, and direct interconnection projects are being implemented between the Kingdom and Iraq, Jordan and Egypt.

 Prince Abdulaziz added that the electrical interconnection projects with the Arab countries aim to enhance the security of the interconnected national networks, their reliability, increase their ability to absorb the entry of renewable energy projects, create a regional commercial market for the exchange and passing of electric energy in order to achieve optimal investment and operation of national generation stations, export renewable energy and connect the Mashreq networks. Arab with its counterparts in the Maghreb.

The Saudi Minister of Energy affirmed that coordination and cooperation with Arab countries is witnessing continuous communication, whether through coordination councils or joint committees in various fields of energy and related issues, such as exchanging experiences in the fields of electricity, renewable energy, energy production and consumption efficiency, and digital transformation in energy uses and applications.

In addition to programs and plans to combat climate change, which include applying the circular carbon economy approach, emission reduction techniques, and others.

He expressed his hope that the Arab Summit held in Jeddah would be a new opportunity to achieve a greater and more effective breakthrough for cooperation, integration and coordination among Arab countries in all fields.   Source: agencies   LINK

An expert sets one condition related to Iran that "the exchange rate will not fall without it"

Economy  |Baghdad today - Baghdad   Today, Thursday, economist Nabil Al-Marsoumi stressed the difficulty of declining commodity and food prices after their rise, at a time when the country is witnessing economic fluctuations with regard to its economic relations with other countries.

Al-Marsoumi told (Baghdad Today) that "at a time when the government reduced the exchange rates of the dollar, the prices of commodities and foodstuffs remained high," noting that "the cheap dollar has become an easy target for smuggling to other countries."

He added, "After a period of 7 months has passed, a big problem has arisen in Iraq, which is the large volume of trade with Iran, as the country imports goods worth $10 billion, at a time when these amounts were settled with Iranian merchants through Emirati banks."

However, he added: "But after the application of the electronic platform, it became settled through cash dollars, so the smuggling of dollars appeared."

He pointed out that "if a new mechanism is not implemented with the approval of the United States on how to deal with Iran, this difference in the exchange rate of the dollar will continue."

It is noteworthy that the Iraqi market is the second trading partner market with Iran after China, with a growth rate of about 20% compared to last year, as Iran's net exports of non-oil commodities amounted to 61 million and 283 thousand tons during the past seven months.   LINK

The International Monetary Agency Expects Annual Inflation In Iraq To Rise To 6.6% In 2023

2023-05-18    Shafaq News / The International Monetary Fund expected that the annual inflation in Iraq will rise to 6.6% in 2023.

The fund said in its latest schedule for May of 2023 that "the annual inflation of consumer prices in Iraq is expected to rise during 2023 to reach 6.6%, after it was 5% in 2022."

He added, "It is also expected that the annual inflation in Iraq will decrease during the year 2024 to 1.6%," noting that "the annual inflation in Iraq during the year 2020 amounted to 0.6%, to rise in the year 2021 to 6%."

He pointed out that "the largest annual inflation recorded for the Arab countries during the year 2022 was in Algeria, where inflation reached 9.3%, followed by Egypt at 8.5%, while Saudi Arabia recorded the lowest annual inflation rate for the same year among the Arab countries at 2.5%." LINK

A Specialist Answers.. What Are The Available Options To Face The Interruption Of Kurdistan's Oil Exports?

2023.05.19 - Baghdad - Nas    On Friday, the economist and professor of economics at the University of Basra, Nabil Al-Marsoumi, explained the available options to face the interruption of Kurdistan region's oil exports. 

Al-Marsoumi mentioned in a post followed by “NAS” (May 19, 2023), that “in light of the Turkish BOTAS company’s disregard of the Iraqi request to resume exporting Kurdistan and Kirkuk oil via the Iraqi-Turkish line, and invoking flimsy arguments related to the line being damaged by the earthquake that Turkey was exposed to in the summer.” And the need to maintain it, which may extend to a few more months, causing severe damage to oil revenues by preventing about half a million barrels from being exported. 

  He added, "There are limited options that Iraq can resort to if the Iraqi oil outage extends for a longer period, including: 

First: Directing the largest possible amount of Kurdistan and Kirkuk oil for local consumption by refining it in the Al-Sumoud refinery with a capacity of 140,000 barrels per day, the Kirkuk refinery with a refining capacity of 56,000 barrels per day, the Al-Siniyah refinery with a capacity of 30,000 barrels per day, the Al-Kisk refinery with a capacity of 20,000 barrels per day, and a modern refinery With a capacity of 16,000 barrels per day, and Qayyarah with a capacity of 10,000 barrels per day. 

  Second: Enhancing the region's exports of crude oil to Turkey through tanks, as the Kurdish Kar company currently exports more than 40,000 barrels per day from the Khurmala field, and this amount can be increased, provided that it is included in the financial accounts in the 2023 budget. 

 Third: The agreement with Jordan to increase the quantities of crude oil exported to it, especially since Jordan currently imports about 150,000 barrels per day, while Iraq's current exports to Jordan do not exceed 10,000 barrels per day. 

Fourth: Given the low cost of exporting oil from Basra by sea to $1.35 a barrel, it is necessary to develop the export capacity of Iraqi oil southwards by sea to 6 million barrels by extending two offshore pipelines with a capacity of 48 inches, rehabilitating the ports of Basra and al-Amiya, building an offshore platform, and making measuring devices.  

  Fifth: It is very important to search for strategic solutions that increase the flexibility of exporting Iraqi oil by diversifying export outlets and subjecting these solutions to economic and technical evaluation away from the political aspect.     https://www.nasnews.com/view.php?cat=107553