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Economy News _ Baghdad
According to these price increases, the Parliamentary Oil and Gas Committee suggested that oil prices would continue to rise globally, attributing the reason to a decline in supplies of “black gold” as a result of the positions of Saudi Arabia and Russia, which decided to reduce their oil production, suggesting that the country’s fiscal deficit would decrease by 50%.
In the midst of this, energy specialists believe that “the increase in oil prices may not be of great importance in the rentier Iraqi economy, as it depends entirely on the revenues generated from oil prices, the rise of which will lead to global price increases in various goods and materials that Iraq will be forced to import it at high prices due to its inability to produce it locally.”
A member of the Parliamentary Oil, Gas and Natural Resources Committee, Representative Zainab Jumaa Al-Moussawi, said in an interview with “Al-Sabah” followed by “Al-Iqtisad News” that “Iraq is one of the rentier countries that depends by up to more than 95% on the financial revenues generated from the sale of crude oil in the markets.” In the global budget, governments always work to set an approximate price in the general budget for the price of a barrel of oil in order for it to be balanced. In the event that global prices rise more than what is specified in the budget, then Iraq will achieve large financial surpluses, and as it is now, after the price of one barrel of oil exceeded the limits. $90 at the time of the budget was based on a price of $70 per barrel, which means there is a surplus estimated at about $20 per barrel.”
Al-Moussawi expected to achieve large financial surpluses as a result of these increases, which would lead to reducing the estimated budget deficit by up to 50%, stressing the need to exploit these increases to support strategic, urban and service projects, suggesting at the same time that oil prices would continue to rise until the end of the year. The current world is a result of the commitment of Saudi Arabia and Russia to reduce, which led to a rise in global demand for black gold, indicating that these rises could reach the range of $120 per barrel during the coming periods.
The expert in energy affairs, Dr. Bilal Al-Khalifa, did not stray far from the previous opinion, when he stressed that “the Iraqi economy is completely linked to oil prices, and therefore any rise in prices represents an increase in financial revenues, which means reducing the planned deficit in the general budget.”
Despite the positive results that Iraq can achieve as a result of oil price increases, Al-Khalifa sees some negative aspects that could accompany these increases, indicating that the rentier Iraqi economy depends almost entirely on oil revenues, and there are no large industries that can cover the need for... The market, therefore, a large percentage of oil revenues will go outside Iraq to purchase commodities that are closely linked to oil prices, and therefore any rise in oil prices will be offset by another rise in the prices of goods, materials, and services in global markets.” The energy expert believes that oil markets are linked to many factors
. Which could lead to a reduction or rise in global prices, especially related to the approaching winter, global tensions, and OPEC decisions.
Added 09/12/2023 - 9:36 AM
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