Specialists: Oil prices are enough to cover costs, and their decline is ineffective

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[size=52]Specialists: Oil prices are enough to cover costs, and their decline is ineffective[/size]

[size=45]Baghdad / Hussein Hatem[/size]
[size=45]After a rise that exceeded the $100 threshold for more than a month, oil prices fell back below $90, recording a decline in global markets, which raised Iraqis' fears in light of the longer political impasse after 2003 and the absence of the public financial budget.[/size]
[size=45]However, specialists stressed that the decrease does not affect the economic situation and employee salaries as long as it is higher than the price specified in the financial budget for the year 2021.[/size]
[size=45]According to the specialists, the prices are still appropriate to cover all costs and achieve a surplus of 100 million dollars during the coming period, while they stressed the need to employ the surplus funds in the industrial and agricultural sectors.[/size]
[size=45]Oil prices fell by more than 1% on Wednesday, affected by the rise in the US dollar and the growth of crude inventories, which offset the support of US production cuts caused by Hurricane Ian.[/size]
[size=45]Brent crude futures also fell 91 cents, or 1.05%, to $85.36 a barrel by 04:41 GMT, while US West Texas Intermediate crude futures fell 85 cents, or 1.08%, at $77.65 a barrel.[/size]
[size=45]Economic expert Diaa Al-Mohsen said in an interview with (Al-Mada), that "whether oil prices rise or fall, the citizen is not a major player in them."[/size]
[size=45]Al-Mohsen added, "The rise and fall in oil prices is subject to many variables, including political, economic and climatic ones."[/size]
[size=45]He pointed out, "Oil prices, even with their decline, are higher than the figure specified during the public financial budget, and this is what keeps the economy away from danger and deterioration."[/size]
[size=45]Al-Mohsen expected, "the arrival of oil revenues during the current year in light of the drop in prices from 90 to 100 billion dollars," pointing out "the possibility of covering the expenses of the past year, and eliminating the financial deficit completely."[/size]
[size=45]He stressed, "the necessity of investing the money generated from oil revenues in the industrial and agricultural sectors and not relying on the rentier economy."[/size]
[size=45]Al-Mohsen pointed out that “there is a reluctance with regard to economic development, and this indicates the government’s loss of correct planning by the ministries of planning and finance, and the failure to employ the surplus funds was the cause of the deterioration of the Iraqi economy and other real sectors such as agriculture and industry, in addition to the tourism sector, and there was no correct employment of the surplus funds. in these sectors,” noting that “this reluctance will not affect the salaries of employees and the operating budget.”[/size]
[size=45]In turn, economic and financial expert Safwan Qusai said in an interview with (Al Mada), that "oil prices started to decline as a result of the interest rate increase by the US Treasury," noting that "the US Treasury is trying to withdraw the surplus liquidity in Europe and the rest of the countries to reduce the effects of inflation."[/size]
[size=45]Qusay added, "The higher the interest rates, the lower the sales rates for international companies, and consequently the need for oil."[/size]
[size=45]He pointed out, "There is a need for oil derivatives in Europe, especially in the next few months, as this may bring oil to a price of 130 dollars a barrel, especially if the United States, China, Japan and Europe raise the percentage of depreciation from their stores."[/size]
[size=45]He added, "The increase in prices will lead to an increase in the price of a barrel of oil in the budget for the next year, as setting the price of $90 a barrel may be appropriate for the budget according to the increase in prices."[/size]
[size=45]And Qusay, that "the industrialized countries will be the first to be affected by the shortage of gas, including Germany, which is considered the third in the world at the level of industries, which prompts the resort to oil derivatives to operate the stations and generate electricity."[/size]
[size=45]He explained, "The prices are still appropriate to cover all costs and achieve a surplus of 100 million dollars during the coming period."[/size]
[size=45]For his part, Professor of Economics at Basra University, Nabil Al-Marsoumi, said in a blog post that Al-Mada followed that "the drop in the oil price to $86 per barrel means that Iraq is close to the danger zone."[/size]
[size=45]Al-Marsoumi added, “Iraq needs a price of $80 per barrel and exports of up to 3.3 million barrels per day in order to obtain oil revenues of up to 140 trillion dinars, which are sufficient with non-oil revenues to cover the requirements of public expenditures, which rose by 25 trillion dinars this year as a result of the legislation of the Food Security Law.” “.[/size]
[size=45]Regarding the salaries of employees and retirees, Al-Marsoumi explained that “they are insured even if the price of a barrel of oil drops to 50 dollars, as one of the members of the Parliamentary Finance Committee says, and he cites that the same prices fell in 2020 to about 38 dollars a barrel and salaries were not cut off.”[/size]
[size=45]He continued, "This is a very accurate statement, but the price was to raise the exchange rate of the dollar against the dinar by 23%, and the employees lost a quarter of their real salaries, while the poor lost a large part of their purchasing power as a result of the rise in commodity prices."[/size]
[size=45]And the professor of economics added, "The price was also an increase in the internal debt in Iraq by 30 trillion dinars to reach 68 trillion dinars."[/size]
[size=45]Al-Marsoumi went on, “As long as there is a balance in the Central Bank of Iraq of up to 85 billion dollars, it is possible to borrow from it, even indirectly, to pay salaries even if the internal debt exceeds the 100 trillion dinars barrier, and if it is not enough, it is possible to raise the exchange rate of the dollar against the dinar.” once again".[/size]
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