Wednesday AM Iraq Economy News Highlights 7-6-22

An expert identifies 3 reasons why Iraq is not benefiting from the financial abundance of oil

{Economic: Al Furat News} The economist Duraid Al-Enezi identified, today, Monday, 3 reasons why Iraq is not benefiting from the financial abundance of oil, in light of the rise in its prices globally.

Al-Enezi told {Euphrates News}, that "by comparing the financial abundance of oil sales, we find it few compared to the high prices of goods and materials," noting that "the current financial abundance is papers and not generating projects that can be benefited from."

He added: "If we compare, the strength of the dinar has decreased by a quarter of its value, the greater that abundance and the higher the prices of commodities."

Al-Enezi pointed out that "poor economic planning and the failure to put money into investment projects and the operation of idle hands did not make Iraq benefit from that abundance," noting that "if Iraq stored 90 billion, its purchasing reality would be 60 billion."   From Raghad Daham   https://alforatnews.iq/news

6 Out Of 9 Billion.. The Bulk Of The Trade Exchange Between Iran And Iraq Took Place Through The Kurdistan Region

2022-07-05  Yes Iraq: Baghdad  The trade data between Iraq, Iran and the Kurdistan region shows that the bulk of the trade exchange between the two countries takes place through the Kurdistan region.

Today, Tuesday, the administration of Sulaymaniyah Governorate announced that the value of trade exchange between the region and Iran increased during the past year to 6 billion dollars, and while he pointed to 3 factors that contributed to the success of this trade exchange, it called on its citizens to be careful during the days of Eid al-Adha due to Corona and hemorrhagic fever.

The Governor of Sulaymaniyah, Haval Abu Bakr, said that "the volume of trade exchange between the Kurdistan Region and Iran in 2021 increased from 2019, despite the outbreak of the Corona virus, and the value of trade exchange between the two parties reached 6 billion dollars, while the value of trade exchange in 2019 reached 2 billion." and 600 million dollars.

Abu Bakr added that "the credit for the high value of trade exchange between the region and Iran is due to the good management in Sulaymaniyah, as well as the high level of coordination between us and the Iranian consulate, in addition to the great support for the regional government."

The Governor of Sulaymaniyah added that "there are currently 12 border crossings between Iraq and Iran, six of which are located in the Sulaymaniyah Governorate, in addition to the Sulaymaniyah International Airport," noting that "the opening of the (Sazan) port is proceeding, as well as the (Tila Ko) border port in the future, and the development of business. Trade exchange between the two sides.

Regarding the approach of Eid al-Adha and the customs and rituals of citizens, Abu Bakr called on citizens to “follow health instructions and implement preventive measures, especially the guidelines for hemorrhagic fever.” He also called for “the need to reduce social contact to increase the number of cases of coronavirus and cholera.”

The trade exchange between Iraq and Iran had recorded during 2021 more than 9 billion dollars, but 6 billion dollars of them took place through the region.   LINK

Oil Prices May Witness A Free Fall .. Iraq Is On The "Verge Of Danger"

2022-07-05  Yes Iraq: Baghdad   The oil expert, Nabil Al-Marsoumi, warned that oil prices will witness a significant decline as a result of the decrease in demand for oil and the economic stagnation, while Iraq will be most affected by the rise in its operational obligations.

Al-Marsoumi said in a clarification followed by “Yes Iraq”, that “the price of Brent crude for futures contracts fell to 104 dollars per barrel for September delivery, while the price of Brent crude for November delivery fell to less than 100 dollars.”

He added, "Citigroup Bank has warned of the possibility of oil prices falling to between 45 to 65 dollars per barrel at the end of the year if there is a stagnation in demand for oil in light of high inflation levels, which may lead to a state of general economic stagnation."

And he indicated that “if those expectations are correct, Iraq will be the most affected among the oil-producing countries due to the significant rise in operating expenses that accompanied the rise in oil prices and that led to an increase in public burdens in the absence of a sovereign fund that could be a wall against the violent fluctuations of oil prices.” , adding, “a copy of it to the drums, by returning to the old exchange rate.” LINK

Baghdad And Beirut Discuss Mechanisms For Paying Iraq's Dues

Political | 08:16 - 05/07/2022  BAGHDAD - Mawazine News  Central Bank Governor Mustafa Ghaleb Mikhaif discussed today, Tuesday, with Lebanese Energy Minister Walid Fayyad, mechanisms for paying Iraq's dues from the agreement to export the fuel oil product.

A central bank statement, which Mawazine News received a copy of, stated, "The Governor of the Central Bank, Mustafa Ghaleb, received the Lebanese Minister of Energy and Water, Walid Fayyad, and his accompanying delegation."

The statement added that "Makhif welcomed at the beginning of the meeting the visiting delegation, stressing his keenness to develop bilateral relations to serve the interests of the two countries."

He pointed out that "during the meeting, aspects of bilateral cooperation between Baghdad and Beirut were discussed, as well as banking mechanisms to pay the Lebanese side's obligations regarding Iraq's dues from the agreement to export the fuel oil product to the Lebanese side." https://www.mawazin.net/Details.aspx?jimare=198622

Dollar Exchange Rates In Local Markets

Economie  2022-07-06 | 03:05  2,703 views   Today, Wednesday, the dollar exchange rates witnessed stability in the local markets.

The selling prices of the dollar were 148,450 dinars per 100 dollars, while the purchase prices of the dollar were 148,350 dinars per 100 dollars.

Earlier, the Central Bank of Iraq decided to adjust the exchange rate of the dollar against the Iraqi dinar, as the purchase price of the dollar from the Ministry of Finance amounted to 1450 dinars, and the price of selling it to banks was set at 1460 dinars per dollar, while the selling price to the citizen is 1470 dinars per dollar.  LINK

The Difference Is 100 Dinars.. Dollar Exchange Rates In The Iraqi Market

Economie| 10:01 - 06/07/2022  Baghdad - Mawazine News, the dollar exchange rates stabilized today, Wednesday, on the Iraqi Stock Exchange.

The selling prices of the dollar were 148,450 dinars per 100 dollars, while the purchase prices of the dollar were 148,350 dinars per 100 dollars. https://www.mawazin.net/Details.aspx?jimare=198653

Oil Prices Are Rising Again

Economie| 08:20 - 06/07/2022   Follow-up - Mawazine News: Oil prices rose, on Wednesday, as investors returned to the market after a sharp decline in the previous session, amid the return of supply concerns to the fore, despite concerns about a global recession.

Brent crude futures rose as much as $1.04 1.01% to $103.81 a barrel at 04:30 GMT, after tumbling 9.5% on Tuesday, the biggest daily drop since March.

US West Texas Intermediate crude rose to $99.98 a barrel, up 0.48 cents, after closing below $100 for the first time since late April. Ended 29/N33   https://www.mawazin.net/Details.aspx?jimare=198645

Iraq Has Reached The Maximum Production Capacity And Its Exports Will Not Reach 3.4 Million Barrels Per Day

Posted On 2022-07-05 By Sotaliraq   Iraq has reached the maximum production capacity and its exports will not reach 3.4 million barrels

Only next August remains, and OPEC's restrictions are completely broken, but Iraq will not have any new increase in production, because it has reached its maximum production capacity, and while Iraq exported in June 82% of its production, it is not expected that Iraq will produce more than 4.6 million barrels per day.

According to the OPEC agreement, Iraq’s production in August will be 4.651 million barrels per day, which is the same base figure in 2018 before the imposition of OPEC restrictions, and it is not expected that Iraq will be able to pump more than this figure.

The oil expert, Nabil Al-Marsoumi, says, “As of next August, OPEC Plus will cancel all production restrictions that it set in April 2020 due to the Corona pandemic, which led to the closure of the global economy and the collapse of oil prices, and the production of OPEC Plus countries will return to the levels of the base year of 2018.”

He added, "With this, Iraq's production share with Kurdistan will become 4.651 million barrels per day, but Iraq will not currently be able to produce more than 4.5 million barrels per day due to production difficulties that led to a decline in the production of some fields, the most important of which is the Rumaila field, which suffers from huge complications and obstacles that caused the inability to From achieving the increase in production in the field to the set goal of 2.1 million barrels per day, which led to a reduction in the rate of oil production in the field to 1.4 million barrels per day.

He explained that "this giant field needs a huge water injection program to help maintain the pressure in the tank and enhance its production, especially since the age of the field is currently between 60 to 70 years, and therefore the oil tank pressure has decreased and this is normal as the field continues to produce over these years." long period. Iraq is also currently experiencing marketing difficulties in the Asian market due to Russian competition resulting from the sale of Russian oil at reduced prices due to Western sanctions imposed on it.

Iraq’s production in June was 4,509, of which 400,000 barrels were produced by Kurdistan, which means that Iraq, as a federal ministry, produced 4.109 million barrels, of which Iraq exported 3.373 million barrels, which means that it exported 82% of its production, meaning that it consumes 736,000 barrels per day locally.

While Iraq will not be able to produce more than 4.5 million barrels per day, of which 400,000 barrels per day is the share of the Kurdistan region, which means that the Ministry of Oil, as a federal ministry, will not produce more than 4.1 million barrels per day.

After the restrictions ended in August completely, the production of the Federal Ministry will be 4.1 million barrels per day, of which approximately 750,000 barrels per day are consumed locally, so its exports at that time will not reach 3,400 million barrels per day at best.  LINK

Iraq .. The Contribution Of Oil To The Budget Amounted To 96%, And The Surplus Was 21 Billion Dollars Within A Month

Shafaq News/ The Ministry of Finance issued the Iraqi state accounts for the month of May for the fiscal year 2022, which indicated that the contribution of oil to the federal budget is still high, reaching 96%, while the government attributed this to zero customs and high oil prices. At the same time he warned of its danger.

Shafak News Agency followed the data and tables issued by the Ministry of Finance in the current month of July for the accounts of last May, which indicated that oil is still the main resource for Iraq's general budget, reaching 96%, which is the same percentage for the month of last April, which confirms that the rentier economy is the basis in the budget Iraq General.

Through the financial tables, it is clear that the total oil revenues for the month of May amounted to 59 trillion and 785 billion and 819 million and 356 thousand and 654 dinars, which represents 96% of the total revenues,

while the total non-oil revenues amounted to two trillion and 432 billion and 775 million and 493 thousand and 926 dinars, which constitutes 4% of the total revenues,

while the total oil and non-oil revenues amounted to 62 trillion and 218 billion and 594 million and 850 thousand and 580 dinars, which is 95% higher than the same period last year 2021,

which amounted to 31 trillion and 917 billion and 236 million dinars as a result of high oil prices.

According to the finance report, the revenues for the month of last May came from the current revenues represented by oil revenues and mineral wealth, amounting to 59 trillion, 489 billion and 48 million and 396 thousand and 722 dinars,

and they came from taxes on income and wealth at the rate of 574 billion and 774 million and 723 thousand and 503 dinars,

and they also came from Commodity taxes and production fees amounted to 413 billion and 30 million and 36 thousand and 822 dinars

and also came from fees that amounted to 479 billion and 131 million and 96 thousand and 127 dinars

and from the share of public sector profits amounting to 352 billion and 741 million and 60 thousand and 477 dinars

and transfer revenues that amounted to 453 billion and 205 million And 204 thousand and 609 dinars

and from other revenues by 427 billion and 362 million and 400 thousand and 503 dinars.

It also came from capital revenues, which amounted to 29 billion and 301 million and 607 thousand and 817 dinars.

Accordingly, the actual surplus for the month of May amounted to 21.834 trillion dinars.

For his part, financial expert Hilal Al-Tahhan considered in an interview with Shafaq News Agency, "The high contribution of the oil sector in the federal budget is considered normal in the case of Iraq for its rentier economy dependent on oil to obtain hard currency and neglect the rest of the other economic sectors."

He added that any country that pursues a rentier economy, such as the case of Iraq, is a serious matter because the country's economy is linked to international oil prices and what these prices face from market fluctuations, pointing out that "what we are witnessing today of rising oil prices may not be witnessed at all in the coming years with the direction of countries the world to decarbonize and use clean energy.

The Prime Minister's Adviser for Financial Affairs, Mazhar Muhammad Salih, had confirmed in March of the year 2021 in an interview with Shafaq News Agency that the reasons for the economy remaining rentier are due to wars and the imposition of sieges during the past era and the political conflicts we are witnessing today, which led to the dispersal of economic resources.

And the Iraqi state’s continuation of relying on oil as the only source of the general budget makes the country at risk of global crises that occur from time to time because oil is affected by it, which makes Iraq turn every time to cover the deficit through borrowing from abroad or inside, which thus indicates the inability to manage Effectively state funds, and the inability to find alternative financing solutions.   LINK