More Iraqi News Sunday PM 10-17-21
More Iraqi News Sunday PM 10-17-21
TLM724 Administrator BondLady’s Corner
During 2022... Iraq is promised a financial balance caused by oil prices
Economy Saturday 16 October 2021 | 10:12 am| Number of readings: 224 On Saturday, the Institute of International Finance expected that Iraq needs a price of 64 dollars per barrel of oil during the next year to achieve financial balance .
The institute stated in a report that "all oil-producing countries will witness a decrease in the oil price to achieve parity or financial balance in the budgets of the oil-exporting countries and without a significant deficit," noting that this is due to "the rise in oil and gas production in these countries in exchange for limited government spending cuts. " .
According to the report, the oil price in Iraq - the second largest oil producer in OPEC - will be at $62 a barrel in 2022, down from $63 a barrel this year .
In the rest of the oil and gas producing countries, Qatar’s budget will witness a financial break-even point at $44 a barrel next year, down from $52 a barrel in 2021 .
Bahrain, which is described as the smallest oil producer in the Gulf - will also witness a financial parity, at $ 76 a barrel in 2022, compared to $ 82 a barrel in 2021 .
In contrast, the fiscal breakeven point in the budget of Saudi Arabia - the largest oil exporter in the world - will drop to $67 per barrel in 2022, compared to $75 per barrel in 2021 .
The Institute of Finance also expected that the UAE - the third largest oil producer in OPEC - would benefit from the drop in the financial breakeven in the oil price to $ 64 a barrel next year, compared to $ 69 a barrel this year .The fiscal parity of Kuwait's budget - an OPEC member state - will also drop to $61 a barrel in 2022, compared to $65 a barrel this year .
The financial balance of the Sultanate of Oman - the largest oil producer in the Middle East outside of OPEC - will also decline during the next year to $ 67 a barrel in 2022, compared to $ 74 a barrel in 2021.
https://aynaliraqnews.com/index.php?aa=news&id22=152929
Ministry Of Oil: We Aim To Achieve The Highest Financial Revenues By Adhering To The OPEC+ Agreement
Sunday 17 October 2021 659 Baghdad: Farah Al-Khafaf The Ministry of Oil confirmed that Iraq aims to achieve the highest financial revenues by adhering to the OPEC Plus agreement. The assurances of the Ministry of Oil came simultaneously with the rise in oil prices, as the price of a barrel of Brent crude oil currently ranges between 83-85 dollars, and this rise is the result of the OPEC Plus agreement, especially since Iraq is at the forefront of the countries that contributed to its success and continuity.
In this regard, the official spokesman for the ministry, Assem Jihad, said in an exclusive statement to “Al-Sabah”, that “Iraq was one of the active members in reaching an agreement to reduce production for OPEC Plus, after the great recession that hit the global economy as a result of the repercussions of the spread of Covid-19, and its cause in inflation.
The oil surplus in global markets and the decline in demand for crude as a result of countries’ actions to restrict the movement of their citizens, land and air transport, the decline of the industrial sector and other negative repercussions from the spread of the epidemic.
And OPEC Plus is an agreement that includes 23 oil-exporting countries, including 13 member states of the Organization of Petroleum Exporting Countries (OPEC), as this agreement was reached in November 2016 with the aim of reducing oil production to improve oil prices in the markets.
Jihad added that {the commitment of the producing countries in OPEC and OPEC Plus to reduce production led to their success in controlling the oil surplus in global markets, and raising the price of a barrel below $20 to current prices, as OPEC and OPEC Plus hold their periodic and emergency ministerial meetings as required.
Conditions and developments of the oil market, preceded by meetings of the governors {representatives of the producing countries in OPEC}, discussing oil market developments and reviewing reports for the concerned authorities and research centers in OPEC, and in light of this it submits its recommendations to the meeting
Ministerial}.
Careful Handling
And regarding the future outlook, the official spokesman saw that {the challenges to the oil market are still present, due to the lack of control by the countries of the world over the Corona virus and new strains, as well as other circumstances, including security and political tensions, economic conflicts, natural conditions, and others in multiple regions of the world} , indicating that it {requires careful handling by the oil-producing countries with the changes in the oil market, and therefore the situation of the oil market can be described as {fragile} as a result of its great influence on the circumstances and changes}.
Oil prices in global markets continued their rapid rise, and prices grew by about 1 percent, to exceed the price of a barrel of Brent crude benchmark, the level of 84 dollars for the first time since 2018.
Oil Strategy
Jihad explained that “the strategy of OPEC and OPEC Plus limits production to the end of 2022 in order to achieve more stability and balance in the oil market, stressing that Iraq aims to achieve the highest financial revenues by adhering to the agreement.”
He also found that the increase in prices to more than $ 80 is a “positive indicator”, but this requires its stability for a long period in order to achieve good financial revenues, warning the need to deal with the requirements of the oil market and prices realistically, and not to rely on the prices of the “bubble” that are generating and declining. As a result of a circumstance or event.
Oil Price
Concerning the prices of Iraqi crude oil, Jihad explained: {The price of Iraqi oil and the producing countries depend on the monthly price of the exported oil and is not subject to daily variables.. Unfortunately, despite the ministry’s notice, many media professionals and observers make the mistake of calculating the daily oil, and they refer to the daily price figures for the barrel, Although Iraq achieved large financial revenues for the state treasury by exporting less quantities of crude oil compared to the quantities previously exported, which proves the ministry's success in implementing its plans and directions. LINK
Experts: Iraq Should Take Advantage Of The Rise In Oil In Investment Projects
Sunday 17 October 2021 358 Baghdad: Huda Al-Azzawi Experts and specialists in economic and financial affairs called for the optimal use of the surplus achieved by the rise in oil prices in the current period to complete investment projects, not only consumer and operational, and while they stressed the need to find a "sovereign fund" to invest the current and future surplus, they indicated that optimism about the rise in oil prices should It should not be excessive because volatility rules the global market.
Adviser to the Prime Minister for Economic Affairs, Dr. Mazhar Muhammad Salih, said in his interview with “Al-Sabah” that “the rises in crude oil prices are subject to three factors: the first is the price averages throughout the fiscal year, the second is the exported quantities, and the third factor is hedging against the fluctuations of the oil market because The cycle of assets in it is fraught with risks, as once supply rises above demand, a so-called (oil glut) occurs, which leads to serious collapses in crude oil prices.
And he indicated that, based on the effective (Financial Management Law), which urges the adoption of an average price of a barrel of oil for the purposes of calculating oil revenues in the budget in a rational and conservative manner, "the general budgets of the Republic of Iraq are designed on oil prices lower than the market price and generate a potential or hypothetical deficit surrounded by a financial buffer that handles Collecting oil revenues that exceed the price of a barrel of oil specified in the budget to fuel expenditures without resorting to borrowing in case the deficit is actual.
He explained that "the problem in the budget is always in (non-oil) revenues that do not reach the ceiling of the target expectations," and that "if we expect, for example, (50 dollars) as the price of a barrel for the next year 2022 budget, we must obtain an average annual return from oil exports. With the export of more than three million barrels, at a price per barrel of oil, its annual average is not less than 75 dollars.
The Financial Adviser to the Secretary-General of the Council of Ministers, Obaid Mahal, said in an interview with “Al-Sabah” that “the issue of the rise in oil prices to more than $80 a barrel and the circulation of international and local news and social media sites is that, citizens are divided between an optimist who believes that he has found relief and another desperate because he He saw nothing but poverty, unemployment and the deterioration of services, and I personally am not optimistic about the increase in oil prices because it does not reflect economic growth or economic development. Rather, the more oil resources increase, and because of mismanagement, consumer spending increases and corruption increases, in addition to the fact that oil prices are a game controlled by adults. from countries and they are not trusted.”
While the researcher in financial affairs, Dr. Imad Al-Harsh Al-Tamimi, confirmed in an interview with “Al-Sabah” that “the rise in oil prices will benefit our economy because the revenues generated through this increase if invested properly and in accordance with a real diversified economic program to create development on sound economic foundations. The private sector will enable us to face the financial risks facing the fiscal policy for the coming period, including those arising from changes in the price of oil and its production.
He added, "It is possible to use the surplus to cover some urgent, unexpected and emergency expenses, and to activate investment projects that have been delayed and lagged for quite some time as a result of lack of funds, as well as to cover the inherited and increasingly persistent deficit that is called or called the scheme, and we may one day reach the natural limits.
It has been set by Financial Management Law No. (6) of 2019 amended at a rate not exceeding (3%) of GDP, reducing the deficit in the public budget on the one hand, and not resorting to internal or external borrowing (paying off debts owed by us) at least if not On the other hand, we will pay off some of our debts, and as a result, the central bank’s reserves of the dollar will increase.”
He continued: "The best thing that can be invested in this increase is to rely on the sovereign fund, which was mentioned in the provisions of Article (19/second), which indicates that when actual revenues exceed the estimates in the budget law, and after covering the actual deficit, if any, the surplus is provided for use in the budget. The budgets of the following years are in a sovereign fund. LINK
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