2024-02-01 13:49
Iraq sells its oil to countries around the world in dollars, and the oil revenues are deposited in the American bank account of JPMorgan and Citi, and Iraq receives these revenues through the US Treasury Department in the form of payments in dollars as well.
This method has been in place for 20 years, and the Finance Committee in the Iraqi House of Representatives wants to change it to get rid of the “dominance of the dollar” and diversify the commission basket, and also to confront the sanctions imposed by the United States on Iraqi banks, amid warnings of the seriousness of this step, which may cause an economic “disaster.” Financial and political of the country.
"""This protocol signed between the Iraqi and American governments dates back to 2004, when it was signed between Paul Bremer, when he was a civilian ruler of Iraq, Ahmed Chalabi, a member of the former Governing Council, and Sinan Al-Shabibi, governor of the Central Bank at the time""", according to the economic expert, Abdul Rahman Al-Sheikhli.Al-Sheikhli explained to News Agency, “This protocol stipulates that Iraq will only sell its oil in dollars, and will not receive a single dollar except through the US Treasury Department, and the dollar will be deposited in the American (JP Morgan) and (Citibank) accounts, from which it will be disbursed to Iraq.”
His money is with the knowledge and approval of the US Treasury. ”He stressed to Sheikhly the necessity of “cancelling this protocol so that Iraq can sell its oil to whomever it wants and in the currency it needs, especially after agreeing with the Federal Reserve to diversify the commission basket, as China and India import oil from Iraq and pay in dollars, and this dollar goes first to American banks and then is delivered.” To the Iraqi government.
Freedom from restriction first
A member of the Parliamentary Oil and Gas Committee, Bassem Al-Gharibawi, agreed with what Abdul Rahman Al-Sheikhli said, that Iraq has the right to sell its oil in any currency, “but the effects of the invasion have not yet emerged from it. ”Al-Gharibawi told News Agency, “Iraq, since the change of the regime, and until now, is as if it has been under guardianship. It has not been liberated from this restriction, so it must first be liberated from this restriction and then sell in other currencies, but it is unlikely to liberate without America’s approval to do so.”
Yesterday, Wednesday, the Finance Committee in the Iraqi House of Representatives called for the sale of Iraqi oil for non-dollar currencies to counter the sanctions imposed by the United States on Iraqi banks.
The Parliamentary Finance Committee stated, in a statement received by the agency: “The Ministry of Treasury is still using the pretext of money laundering to impose its sanctions against Iraqi banks, which requires a national stance that puts an end to these arbitrary decisions,” indicating that “imposing sanctions on Iraqi banks would undermine and obstruct... The steps taken by the Central Bank to adjust the stability of the dollar exchange rate and reduce the selling gap between the official and parallel rates".
”The committee announced its rejection of these practices, “because of their repercussions and consequences on the livelihood of our citizens,” renewing its “call on the government and the Central Bank of Iraq to take quick measures to get rid of the dominance of the dollar, by diversifying our cash reserves of foreign currencies.” It also proposed obliging the Ministry of Oil to By selling Iraqi oil in other foreign currencies.
Economic collapse
Commenting on this step, the economic researcher, Omar Al-Halbousi, said that “the Finance Committee’s proposal to sell Iraqi oil for something other than the dollar is ""considered suicide and the destruction of Iraq and its economy"". Rather, it is tantamount to a declaration of war on the global financial system led by America, which is more dangerous than military targeting, because the power of America controls the global financial system through the petrodollar agreement. ”Al-Halbousi added, while speaking to News Agency, “The Finance Committee seems to be ignorant of the petrodollar agreement approved by the OPEC countries, which specified that oil is sold in US dollars, and in fact the dollar was linked to oil and the agreement proceeded in this manner.” He pointed out that anyone who leaves this agreement will cause the destruction of his country and its economy, especially since when Iraq sells its oil, it does not receive the oil money directly. Rather, there is an account in the JP Morgan bank in which the money from the sold Iraqi oil is placed, and the United States supplies Iraq. In dollars on a semi-monthly basis.
Al-Halbousi stated, “Any step by the Iraqi parliament or government to sell Iraqi oil for something other than the dollar will cause a set of risks that will destroy Iraq, as the United States will impose an embargo on Iraqi oil, in addition to lifting immunity from Iraqi funds, and returning Iraq under Title Seven.” Preventing the dollar from reaching Iraq, which means Iraq’s economic collapse, and also preventing Iraq from entering the global SWIFT system, which means completely destroying the banking sector.”He continued: "Therefore, Parliament and the government should not think about this step because it will cause an economic, financial and political catastrophe, and put Iraq into isolation from which it is unable to emerge, especially since Iraq is a consumer country in light of the lack of industry and agriculture."
The economic expert stressed, “The concerned Iraqi authorities should not deal with these issues with emotion, and rush after external agendas that try to lead Iraq towards the abyss, since the petrodollar agreement made the United States dominate the global financial system, which is the creation of the power of the United States, and that Deviating from this agreement will push Washington to move with all its tools, even military ones, to preserve the petrodollar agreement and prevent any loophole that could destroy the global financial system, which has made America the main controller of the world and the unipolar policy alone.
"Violent" reactions
For his part, economic expert, Nabil Al-Marsoumi, warned of “violent” American reactions if Iraq decided to replace the dollar with other currencies in its sale of crude oil. Al-Marsoumi said in a post on the social networking sites “Facebook” that “the pricing of oil in dollars is not only related to the standard oil crude oils that are priced in dollars, namely Brent and West Texas Intermediate crude oils, but because oil trade is the largest in the world as it is not limited to the exchange of oil in Commodity markets only, ""but because there is a very large trade in paper barrels amounting to more than tens of times the real exchange, especially on the New York Stock Exchange and the London Stock Exchange, through speculation in futures contracts, as the New York Stock Exchange has about 3 billion contracts annually, with an average value of 1,000 trillion dollars.""”
He added: “Therefore, the calls to sell Iraqi oil in a currency other than the dollar lack realism, and reflect a wrong understanding of the basics of oil pricing in the global market, and because they will expose Iraq to very violent American reactions because abandoning the dollar is an American red line,” explaining that. It "will threaten the global position of the dollar, which currently represents 60% of global monetary reserves, and will undermine the economic importance of the United States at the global level."
The United States of America had previously imposed sanctions on a number of Iraqi people ""linked to armed factions"", in addition to sanctions on the "Fly Baghdad" airline company, and imposed sanctions on Al-Huda Bank and its owner, Hamad Al-Musawi.
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This is not new to us. There has been much about what is in the article. There are misconceptions and realities. Take in the whole picture and talke note of contracts.. Paper oil trading. Those paper contracts are spread far and wide globally.. That is just the way it is for now. Is that going to change anytime soon? Not with out signficant reprecussions.
Al-Sudani and his teams will be very aware of that fact. His position today would not be well versed in many matters the average politician would actually know to the full extent necesssary to make intelligent decisions.
The new electronic systems are working. How do we know that? look at what just happened with the Al-Huda Bank.. Selling counterfiet dinar to buy dollars.. What? That will not only have made the UST unhappy, but the Iraq Central Bank. Think of the infection that could have caused if true. The time to show Iraq's cards is up.. imo ~ MM | | | |
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