Friday, September 11, 2020 01:56 PM
The government is in trouble ... disagreements behind closed doors over compliance with OPEC + cuts
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Debate has resurfaced within [You must be registered and logged in to see this link.] over whether it should seek exemptions from cuts to OPEC + oil supplies, as low prices put pressure on its public finances and challenge the government, which is struggling to address the devastation caused by years of war and rampant corruption.
With oil prices currently trading at about $ 40 a barrel, sources in [You must be registered and logged in to see this link.] OPEC say that opposition to oil cuts is increasing behind closed doors, and talks about reviving old calls to consider the size of the cuts have reappeared.
A senior Iraqi official familiar with the talks said that there is a difference of views between the Oil Ministry and the Prime Minister's Office regarding full compliance with the cuts or requesting an exemption next year.
The official, who asked not to be identified, said the Oil Ministry wanted to request an exemption, while officials in the Prime Minister's Office insisted on compliance.
The official added that the dispute is over the current financial problems of Iraq.
A source in OPEC said that [You must be registered and logged in to see this link.] believed that it “was not treated properly in December 2016 when it was not excluded. With the economy still suffering due to low prices, this issue will continue to reappear. ”
The source in OPEC went on to say: “There is strong opposition ... to their (Iraq) continuing participation in supply cuts,” adding that there had been informal talks about Baghdad’s need to request an exemption from [url=https://www.thebaghdadpost.com/ar/Story/t/148621/%D8%AA%D8%AE%D9%81%D9%8A%D8%B6%D8%A7%D8%AA %D8%A7%D9%84%D9%86%D9%81%D8%B7]oil cuts[/url] in 2021, but it was not clear whether [You must be registered and logged in to see this link.] would actually take that step. or not.
And the economy and the oil sector in [You must be registered and logged in to see this link.]Wracked by years of wars, sanctions and confrontations with militants after the American invasion.
Baghdad complains that it is struggling to revive the stagnant oil industry, at a time when the rest of OPEC members benefit and strengthen their market shares. [You must be registered and logged in to see this link.]
counting on oil to finance 97% of its government budget. Iraq, the second largest producer in OPEC, previously failed to fully comply with the OPEC + oil production cuts, as it pumped more than the targets set for its production since the agreement was first signed in 2016 between OPEC and its allies led by Russia. On Wednesday, Finance Minister Ali Allawi told Parliament that reforming the economy in [You must be registered and logged in to see this link.] will take five years of work, and that government debt has reached between 80 and 90% of the national product, while the external debt is $ 133 billion.[You must be registered and logged in to see this link.]
As of May 1, the Organization of the Petroleum Exporting Countries (OPEC) and allies, in what is known as the OPEC + group, implemented a record cut of 9.7 million barrels per day, or ten percent of global production, after the Corona virus crushed a third of global demand.
As of August 1, the cuts were eased to 7.7 million barrels per day until December.
Iraqi politicians criticize the agreement signed by the previous caretaker government, according to which Baghdad is committed to significantly reducing its production.
In May and June, [You must be registered and logged in to see this link.] agreed to reduce its crude production by just over a million barrels per day, while easing that cut to 849,000 barrels per day from July until the end of the year. [You must be registered and logged in to see this link.]
remained a member of the agreement, but it produced more than its share. But [You must be registered and logged in to see this link.]He now wants to fully adhere to the agreed production targets and even compensate for his previous excess production, between May and July, with a bigger cut in the following months.
In August, [You must be registered and logged in to see this link.] reached [You must be registered and logged in to see this link.] highest compliance rate in the past few years, but he said it may need to extend the compensation period by two months.
The current prime minister, Mustafa al-Kazemi, took office in May, becoming the third head of an Iraqi government in a ten-week chaotic period, tracking bloody months of protests in the country, strained by decades of sanctions, war, corruption and economic challenges.
A spokesman for the Iraqi Oil Ministry said, last week, that Baghdad remains fully committed to the agreement to reduce OPEC + oil supplies, denying media reports that it is seeking an exemption from the reduction agreement during the first quarter of 2021.
In June, [You must be registered and logged in to see this link.] said that it was requested by OPEC should take into account the economic situation of members when sharing the burden of future oil production cuts.
The World Bank estimates that [You must be registered and logged in to see this link.] 's economy will contract by 9.7 percent in 2020; In light of the decline in oil prices and the Corona virus, compared with a growth of 4.4 percent in 2019.
[You must be registered and logged in to see this link.]
Debate has resurfaced within [You must be registered and logged in to see this link.] over whether it should seek exemptions from cuts to OPEC + oil supplies, as low prices put pressure on its public finances and challenge the government, which is struggling to address the devastation caused by years of war and rampant corruption.
With oil prices currently trading at about $ 40 a barrel, sources in [You must be registered and logged in to see this link.] OPEC say that opposition to oil cuts is increasing behind closed doors, and talks about reviving old calls to consider the size of the cuts have reappeared.
A senior Iraqi official familiar with the talks said that there is a difference of views between the Oil Ministry and the Prime Minister's Office regarding full compliance with the cuts or requesting an exemption next year.
The official, who asked not to be identified, said the Oil Ministry wanted to request an exemption, while officials in the Prime Minister's Office insisted on compliance.
The official added that the dispute is over the current financial problems of Iraq.
A source in OPEC said that [You must be registered and logged in to see this link.] believed that it “was not treated properly in December 2016 when it was not excluded. With the economy still suffering due to low prices, this issue will continue to reappear. ”
The source in OPEC went on to say: “There is strong opposition ... to their (Iraq) continuing participation in supply cuts,” adding that there had been informal talks about Baghdad’s need to request an exemption from [url=https://www.thebaghdadpost.com/ar/Story/t/148621/%D8%AA%D8%AE%D9%81%D9%8A%D8%B6%D8%A7%D8%AA %D8%A7%D9%84%D9%86%D9%81%D8%B7]oil cuts[/url] in 2021, but it was not clear whether [You must be registered and logged in to see this link.] would actually take that step. or not.
And the economy and the oil sector in [You must be registered and logged in to see this link.]Wracked by years of wars, sanctions and confrontations with militants after the American invasion.
Baghdad complains that it is struggling to revive the stagnant oil industry, at a time when the rest of OPEC members benefit and strengthen their market shares. [You must be registered and logged in to see this link.]
counting on oil to finance 97% of its government budget. Iraq, the second largest producer in OPEC, previously failed to fully comply with the OPEC + oil production cuts, as it pumped more than the targets set for its production since the agreement was first signed in 2016 between OPEC and its allies led by Russia. On Wednesday, Finance Minister Ali Allawi told Parliament that reforming the economy in [You must be registered and logged in to see this link.] will take five years of work, and that government debt has reached between 80 and 90% of the national product, while the external debt is $ 133 billion.[You must be registered and logged in to see this link.]
As of May 1, the Organization of the Petroleum Exporting Countries (OPEC) and allies, in what is known as the OPEC + group, implemented a record cut of 9.7 million barrels per day, or ten percent of global production, after the Corona virus crushed a third of global demand.
As of August 1, the cuts were eased to 7.7 million barrels per day until December.
Iraqi politicians criticize the agreement signed by the previous caretaker government, according to which Baghdad is committed to significantly reducing its production.
In May and June, [You must be registered and logged in to see this link.] agreed to reduce its crude production by just over a million barrels per day, while easing that cut to 849,000 barrels per day from July until the end of the year. [You must be registered and logged in to see this link.]
remained a member of the agreement, but it produced more than its share. But [You must be registered and logged in to see this link.]He now wants to fully adhere to the agreed production targets and even compensate for his previous excess production, between May and July, with a bigger cut in the following months.
In August, [You must be registered and logged in to see this link.] reached [You must be registered and logged in to see this link.] highest compliance rate in the past few years, but he said it may need to extend the compensation period by two months.
The current prime minister, Mustafa al-Kazemi, took office in May, becoming the third head of an Iraqi government in a ten-week chaotic period, tracking bloody months of protests in the country, strained by decades of sanctions, war, corruption and economic challenges.
A spokesman for the Iraqi Oil Ministry said, last week, that Baghdad remains fully committed to the agreement to reduce OPEC + oil supplies, denying media reports that it is seeking an exemption from the reduction agreement during the first quarter of 2021.
In June, [You must be registered and logged in to see this link.] said that it was requested by OPEC should take into account the economic situation of members when sharing the burden of future oil production cuts.
The World Bank estimates that [You must be registered and logged in to see this link.] 's economy will contract by 9.7 percent in 2020; In light of the decline in oil prices and the Corona virus, compared with a growth of 4.4 percent in 2019.
[You must be registered and logged in to see this link.]
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