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CandyKisses:  US bank: Oil may jump to $ 120 a barrel

Economy News - Baghdad

Oil prices could rise back to triple digits if crude oil supplies face more pressure – and this could slow global economic growth to near a halt, according to JPMorgan.

The bank's strategists said in a note that oil prices jumped 27 percent over the past month to trade at a 10-month high.

If prices maintain these levels, they are likely to lower global GDP growth by 0.5 percentage points over two quarters, according to the U.S. bank.

The bank expects Brent crude to fall to around $86 a barrel by the end of the year, but experts have warned that prices could rise and drag the economy further if oil supplies face sustained pressure.

The bank's strategists said there was concern that the latest supply cuts were not over and that Brent crude could jump further to $120 a barrel, which would mean a 60 percent jump in the second half of the year.

Bank analysts said higher prices could push global inflation to around 6 percent until the end of the year and hurt global gross domestic product by 1.3 percent year-on-year over the next two quarters.

"In fact, a cumulative 60 percent jump in oil prices would indicate the kind of shock that usually occurs only before recessions," the bank added

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Tishwash:  Al-Sudani to the heads of American companies: Iraq is prepared to attract all types of investments

Prime Minister Muhammad Shiaa Al-Sudani met in New York, yesterday evening, Thursday (Baghdad time), with a number of presidents and representatives of American companies, on the sidelines of his participation in the 78th session of the United Nations General Assembly.

Al-Sudani met with representatives of: The American company General Electric, the multinational technology group Honeywell, and the American law firm Kuvenkin.

The meeting witnessed, according to a statement from the Prime Minister’s Office, a copy of which {Al-Furat News} received, “discussions on expanding the partnership and cooperation between Iraq and these companies, and the possibility of strengthening and developing previous agreements, within the framework of the government’s pursuit of economic reform and laying the foundations for technological and industrial development in the Iraqi economy.”

The Prime Minister stressed, during the meeting, that "the Iraqi investment arena is prepared to attract all types of investments, especially within the government's continuing efforts to build infrastructure, as well as developing the rest of the economic and industrial aspects."  link

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Tishwash:  Al-Sudani: We are preparing a draft of the economic reform law and concluding a trade and investment agreement with America

Prime Minister Muhammad Shiaa Al-Sudani held a meeting this evening, Thursday (Baghdad time), with members of the American Chamber of Commerce, in the presence of a number of businessmen, investors, and representatives of major American companies.

Al-Sudani appreciated the efforts of Vice President of the American Chamber of Commerce, Steve Lutz, in arranging this meeting to inform investors about the business environment in Iraq.

He stated that Iraq is a fertile land for investment in many important sectors, and there are natural resources that have not been invested yet, and the time has come to invest them in a way that achieves prosperity for the Iraqi people and contributes to strengthening the strategic relationship with the United States.

The Prime Minister delivered a speech during the meeting, the highlights of which are the following:

Our government invests revenues correctly to activate important economic sectors other than oil, as it is not possible to continue to rely on oil to strengthen the budget and cover obligations, as was the case throughout the previous stage. 

The wrong path in wasting burned gas will stop within 2-3 years, after the completion of the gas projects that began with Total and the Emirati and Chinese companies in the fifth round.

We announced 11 fields and exploration blocks in the governorates. Anbar, Nineveh, and Najaf, which include natural gas that will be invested for the first time in Iraq’s history.

Economic reform is a priority, and it cannot be implemented without the presence of an effective and capable private sector that is a partner with the government.

We focused on providing a favorable business environment for foreign companies in general, and American companies in particular, by virtue of the capabilities they possess, and also within the vision path of the partnership between Iraq and the United States.

The relationship between Iraq and the United States cannot remain limited to the security aspect.

The business environment in Iraq requires a great effort to reduce bureaucracy. We have the decision and will to stop corruption through legal measures, and companies cannot be made vulnerable to blackmail or red tape.

- Every project and file related to a company will be personally sponsored and followed up by us, and we will work to overcome all obstacles you face.

We are working on reforming the tax system and the customs system, and we are currently preparing a draft economic reform law that addresses loopholes in several laws.

We have a draft system to regulate e-commerce, and the government is committed to protecting intellectual property, and we approved a draft law that was sent to the House of Representatives for a vote.

We are working diligently on the draft electronic payment law, and we have made great strides in financial and banking reform, through our relationship with the Federal Reserve and the US Treasury.

Today we have clear and transparent trade subject to global compliance standards in financial transfers.

The Ministry of Commerce, through the Commercial Attaché in Washington and with the US Trade Representative Office, is working to hold meetings for the third session of the Trade and Investment Framework Agreement, in the first quarter of 2024.

The function of this agreement is to identify the challenges facing trade and investment relations between Iraq and the United States.

We call on all American companies to present their challenges facing their presence and work in Iraq. To develop solutions for it.

- We supported the private sector in the budget law, through the Iraq Fund for Development, whose capital reaches $750 million during 2023, and in 2024 we will add an additional amount. 

We are currently conducting understandings with Arab and international investment funds, specifically with the Saudi Investment Bank, where we have a partnership in this aspect.

The government will provide sovereign guarantees in the budget law to establish industrial and agricultural projects in Iraq.

We have understandings with the German Hermes Foundation and the Italian Sochet Foundation, and they are prepared to provide production lines to important laboratories and factories in the industrial sector in exchange for 15% from Iraqi businessmen and 85% provided by the government as a sovereign guarantee.

A delegation of Iraqi businessmen toured Germany and Italy and identified factories, and is currently in the process of reaching understandings to implement these projects that were chosen according to market requirements. 

We want to achieve a real shift in health services, and we have a health insurance law, and we have a new philosophy that represents a transitional stage for implementing this law, through joint operation with companies specialized in providing health services.

We offered 6 hospitals and we hope that there will be American companies specialized in providing medical and therapeutic services in operating these hospitals.

The size of the pharmaceutical market in Iraq is approximately $3 billion annually, with national production representing only 10%, and the rest is imported.

The Council of Ministers issued a package of decisions to support pharmaceutical producers, and today there are more than 245 requests to establish production lines for the pharmaceutical industry. 

We are moving strongly towards using modern irrigation techniques to confront water scarcity. There are arable areas and an attractive environment, but they need specialized technologies and companies to develop this sector.

We concluded contracts with Emirati, Chinese, and Iraqi companies to establish solar power plants, and we concluded a contract with Total to generate 1,000 megawatts of solar energy. link

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