Economic report: Iraq is not the "savior" of the global oil crisis

POSTED ON[You must be registered and logged in to see this link.] BY [You must be registered and logged in to see this link.]

[size=52]Economic report: Iraq is not the "savior" of the global oil crisis[/size]

[size=45]On Tuesday, the South Korean Econo Times newspaper ruled out that Iraq would have the ability to secure an alternative to the global oil demand market, in light of the shortage it suffers from, pointing to a series of challenges facing Iraq, especially corruption, which is dealt with on the basis that it of the existing "rules of the game" and not just a pest.[/size]
[size=45]And after the economic report indicated that French President Emmanuel Macron said during the last seven countries summit in Germany that Saudi Arabia and the UAE, two of the largest exporters in OPEC, may not be able to increase their oil production in the next six months in order to deal with the increase in global demand for oil. But he considered that this question raises the question: If Saudi Arabia and the UAE are not able to pump more barrels of oil, who will do that?[/size]
[size=45]Corona epidemic and the Ukrainian crisis[/size]
[size=45]The report pointed out that the global oil markets had been struggling for months under the influence of the recession caused by the Corona epidemic and the start of the global recovery, but the Ukrainian crisis caused chaos in global markets, as the rapid rise in demand led to a decline in the contraction of supplies and then the rise in prices around the world.[/size]
[size=45]The report pointed out that world leaders are trying to persuade the exporting countries to increase extraction from their oil reserves and thus raise production, and great hopes were placed on Saudi Arabia, which US President Joe Biden is visiting after two days, despite his pledge to isolate it because of its human rights practices.[/size]
[size=45]While referring to Macron's comments confirmed by the UAE, showing that neither Saudi Arabia nor the UAE have the spare capacity to pump additional barrels, he continued that some analysts considered that the entire OPEC system had "collapsed", and therefore there was a need to look towards other countries that have oil reserves. untapped.[/size]
[size=45]And he indicated that, in the past weeks, Washington began exploratory talks with Venezuela and Iran, and they are likely to demand, in return, the easing of economic sanctions imposed on them, in exchange for increasing their production.[/size]
[size=45]Pipe dreams[/size]
[size=45]In this context, the report specifically referred to Iraq, explaining that it has a great ability to extract and export oil, as it produces about 4.5 million barrels per day, and according to the Iraqi Minister of Oil, it is likely to raise its production to 6 million barrels per day by the year 2027, then to 8 million barrels.[/size]
[size=45]After the report pointed out that the increase in Iraqi production would be a “great blessing” on global oil supplies, the report added, however, that “corruption, political paralysis and insecurity make Iraq an unreliable partner to secure additional barrels of oil.”[/size]
[size=45]The report spoke of the “imbalance of Iraqi politics,” which allowed for a concentration of the country’s wealth in the hands of a minority of politicians and bureaucrats. Corruption within the regime cost billions of dollars and created “a weak state that is unable to control its natural resources.”[/size]
[size=45]He noted that "Iran-backed militias regularly attack the oil and gas infrastructure, while unclear legislation leaves the federal government and the Kurdistan Regional Government wrangling over the rights to control the oil fields."[/size]
[size=45]In addition, international companies are wary of doing business inside Iraq due to the unpredictable business climate and high levels of corruption where bribery is prevalent, adding that for those companies that have managed to gain a foothold, they are not insured against illegal interference from the state by its actions.[/size]
[size=45]The “deficit” of the judiciary[/size]
[size=45]The report dealt with the absence or inability of local judicial authorities to guarantee the rights of companies, referring in this context to the case of Petrofac, which was tried in Britain last year and ordered to pay a fine of 70 million pounds due to illegal payments made to obtain contracts in countries in the Middle East. , including Iraq.[/size]
[size=45]The report also mentioned the case of the Kuwaiti “Agility” company, which filed a lawsuit abroad against Iraq for its arbitrary confiscation of $380 million of its investments in the “Kork” Communications Company in the Kurdistan Region.[/size]
[size=45]The report considered that such cases and cases related to corruption and rulings, show that corruption in Iraq is one of the “rules of the game, and not a scourge that must be dealt with,” recalling that “Agility” in the wake of the judicial ruling that was not in its favour, issued a statement in which it said that foreign investors should Those who wish to invest in Iraq, “must think carefully about the risks of investment.”[/size]
[size=45]local challenges[/size]
[size=45]The report concluded by saying that all this does not present an appropriate picture for foreign oil companies to invest in and partner with the Iraqi energy sector, with the aim of trying to overcome the stagnation in global oil production, despite the report indicating that Iraq enjoys a unique position that enables it to benefit from the situation and increase its production.[/size]
[size=45]The report concluded by saying, “The familiar domestic challenges mean that Iraq is not likely to be the solution to the global oil shortage,” adding that “Iraqi corruption, from ordinary citizens who have to pay bribes, to international investors who have been deceived by hundreds of millions Of dollars, it is a disaster for everyone, except for Iraqi officials.”[/size]
[size=45]"It seems that they want to keep it that way," he concluded.[/size]
[size=45][You must be registered and logged in to see this link.]