For many countries, the ongoing oil price depression has brought about a new era of impending economic implosion. Yet no one seems to suffer as much as Iraq nowadays – a country with no appropriate government, battle-bled from its fight against the Islamic State and torn apart by internal conflicts.
With a median age of 21 years, the challenge for Iraq as a federal state within its current borders is all the more complicated as the government has little to offer to large swaths of young people, tired of nepotism and red-tape.
Iraq could mitigate risks by handing out cash – it has none, it could tap into its reserves – again, very little (some $62 billion), effectively, Baghdad’s only survival strategy is to wait and pray for better times.
Just when Iraq hoped to rebuild the country – its 2020 budget has been the largest in history and has focused on revamping the nation’s dilapidated infrastructure – external developments have cut the ambitious targets short.
The massive budget was in many ways a response of the 2019 protest waves which did not subside in 2020 – ultimately, they have led to the ouster of the Abdul Mahdi-led government (who continued as a caretaker until March 02 after the Parliament-nominated replacement candidate, the US-educated Mohammed Tawfiq Allawi, failed to generate sufficient parliamentary approvals).
The new candidate for the Prime Minister role, Adnan al-Zurfi, might face a similar future as getting Sunnites and Kurds onboard will inevitable be a major challenge.
Source: Thomson Reuters.
After Saudi Arabia dropped its April-loading official selling prices, for many the key question was whether Iraq and Kuwait, oil exporters that routinely rely on the price signals provided by Saudi Aramco, would follow suit and embrace price cuts into crude differentials.
Both did, cognizant of the risks inherent in not doing so, yet did so grudgingly for it was a price cut that went deep into the flesh of the government. Iraq dropped its Asia-bound Basrah Light OSP to a $-3.2 per barrel discount against Oman/Dubai, the lowest in years, whilst the European April price decreased by $5 per barrel to $-8.8 per barrel against Dated.
With Brent prices around $20 per barrel, the prospect of selling Basrah Light to Europe for some $10 per barrel is truly disheartening (given the roughly $60 per barrel breakeven oil price).
While, in theory, it remains true that Iraq could partially offset all the losses incurred by the ongoing price war by ramping up production levels, yet even under OPEC+ production quotas it has more or less produced as much as it wants (in fact, Iraq was one of the most blatant transgressors of the output caps).
Moreover, the oil price drop is just too big for Iraq’s economy to swallow – the 2020 draft budget was assumed to be around $135 billion, with 93 percent of government revenues coming from oil exports.
The assumed annual average oil price stood at $56 per barrel in 2019. Should the Saudi-triggered differential cuts become a mainstay, Iraq now stands to garner a mere 30 percent of what it originally expected for this year.
In such a case it could burn all its reserves totaling some $62 billion by the end of 2020, leaving it dependent on another IMF package.
Now to this multitude of problems add the swift spread of the viral pandemic. As of April 01, Iraq has a little more than 720 confirmed cases, with some 180 recovered cases and 52 deaths.
The 7 million state employees remain a burden on the shoulders of the federal government, however, life in Iraq is paralyzed and private enterprises are on the brink.
Iraq’s south witnessed its first corona case relatively late (March 09) – were the pandemic to spread around Basrah, it might even endanger oil production as supplying the project sites would become much more difficult.
The virus threat might curb the build-up of military antagonism, rising on the back of rumors circulating in Iraq that the United States wants to increase the number of US troops in Iraq, in a way not too dissimilar to what happened to the omnipresent protests.
The emergence and rapid spreading of the viral plague have mollified popular anger – primarily due to people being afraid to contract a highly contagious virus at a demonstration – however, has did not alleviate the complexity of all the tasks to be resolved.
The Iraqi government is running monthly deficits as high as $2 billion and with very little of the nation’s crucial industrial output being in private hands, it should come as no surprise that the federal authorities could only garner less than $50 million in donations with the aim of combatting the spread of the outbreak.
Iraq has closed down its borders and the government introduced a 24-hour curfew, strictly enforced by the police, substantially limiting the last remaining lifeline of urban inhabitants – informal trade.
All this complicates Baghdad’s dealings with the Kurdish administration, too. Under the November 2019 deal, the Kurdish Regional Government (KRG) committed to providing the federal state oil marketer SOMO with 250kbpd of crude in return for a 12.6 percent share of the Iraqi budget – as is oftentimes the case with Iraqi covenants, this never happened.
KRG claimed that it would wait until a proper government is formed in Baghdad and from there on would start complying with the agreement – a smart tactical move, seeing in retrospect how Tawfiq Allawi failed to consolidate political allies around his candidacy.
A stalemate of sorts is the end results – Baghdad does not want to push too hard not to jeopardize its Kirkuk exports that go through KRG territory, whilst Erbil is waiting to finally get a counterpart that would command at least some internal power.
Iraq is in big trouble. The oil war is killing them softly and triggering a civil war. Get out fast if you can! [Oil Price]
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Earthquake in Biden CA border with NV was 5.7 then downgraded to 5.2 felt it wide range of areas?
My warning stands for all those 12 sates in North West of USA.
CA, NV, UT, CO, OR, WA , ID , AZ, and other states close to it.
The good things are all are in prepared. Massive Rains in North West is going to put a lot of stress in the faults that are ready to go? I ask all prepare prepare and spends your money from 1200 checks on foods that last longer. Alcohol , drugs, Marijuana is not going solve your problems. I have a vodka bottle for ER use i put on wounds only. A major quakes is on the way in North America?
Chaos rocks Trump White House on virus’ most tragic day
Analysis by Stephen Collinson, CNN
Updated 3:31 AM ET, Wed April 8, 2020
(CNN)The chaos and confusion rocking President Donald Trump’s administration on the most tragic day yet of the coronavirus pandemic was exceptional even by his own standards.
Trump set out Tuesday to cement his image of a wartime leader facing down an “invisible enemy” at a dark moment as the country waits for the virus to peak and with the economy languishing in suspended animation.
“What we have is a plague, and we’re seeing light at the end of the tunnel,” the President said, on a day when a record number of Americans succumbed to the wicked respiratory disease.
But instead of putting minds at rest, Trump’s wild performance instead put on a display many of the personal and political habits that have defined his tumultuous presidency. It was a troubling spectacle coming at such a wrenching chapter of national life, the kind of moment when Presidents are called to provide consistent, level leadership.
To begin with, Trump sparked concern that he will prevent oversight of the disbursement of economic rescue funds by removing a watchdog official responsible for overseeing the $2 trillion package. The move, coming after Trump ousted an intelligence community inspector general last week, was yet another sign that an already impeached President is using the cover of the worst domestic crisis since World War II to further erode constraints on his power.
Trump’s acting Navy secretary quit after an episode in which he called an aircraft carrier captain dismissed for raising the alarm about virus infections among his crew “stupid.”
My Predictions for April 7 2020 to May 5-2020 Time is 4p Canada Time.
We have Super Moon that is very close to earth and every one can see it also pinkish as well indeed.
This Super Moon will bring a lot of misery to the world destruction’s and death to mankind.
This moon will bring 5.5 quakes to 8.0 plus in ring of fires and places never seen quakes will suddenly get quakes. This moon will causes more death as Corona Virus or disease X is ripping the people of earth. We learned that we are one people and all are interconnected to each others due global pandemic Disease X. I will see DR Debra Brix and DR Anthony Faucci will resign and had it with Donald Trump crashes about what is good steps need be taken. If Donald Trump does not come with Mask N95 and ask every one use it and also make mask available to all citizens of USA then USA will pay a big price of deaths up to 1million plus as a result of global biological disease X. We see many Volcanoes will be active and with possibilities of major attack on Iran 70 percent because both nations needs war to stay in power. There will be a lot of food shortages we warned you 3 months ago will not go away indeed. If those can store foods for 6 months to a year is prefect if not 2 months is fair. We have report of shortages of food globally and when 9 meals away for final riots globally and global martial law is coming sooner than later. We have over 50 nations under total Martial Law with tanks and troops. I plea to all be nice to each others and at least you all are in ring of fire are prepared for food and water. Always use of mask and gloves globally and shop for foods and necessary items few times a week. We are headed for global hunger , we saw in USA people rushing to the food banks and now food banks are running very low in this global crisis. North America 9 meals away from rioting indeed with high crimes already started.
We ASK YOU PLEASE GO TO BANKS AND GET CASH NEEDED. AT LEAST 2500 US DOLLARS OR EQUIVALENT OF IT GLOBALLY. Floods and heavy snow will make the deliver of foods if any left much harder. So little time left to organize for mass lock down . This virus needs Ava-lox anti bio-tics and 5000 Dollars cost ZYVOX can heal this corona. We do not need Anti Malaria tablets that make your liver damages and kidney damages. Never use of Vanomycin since brings red man syndrome. This disease x is not a lung disease rather than lack of oxygen to the lungs , easily can be solved by giving oxygen at 100 percent. If ventilator is used need be slowly then higher rate. We have no more rights in this global martial law and who control foods will control masses and who control oil will control the world and that is why gas so cheap ? I warn all North West coast of USA fromm Vancouver BC to San Diego and NV, UT,CO, ID, WA and WY yellow Stone , MS, OK, TX AZ, pretty much 30 states in USA are included for quakes?
Global New World Order is here. They have to create global civil war and global martial law. Philippine PR said to troops for martial Law if any one get close to you shoot them dead?
https://www.aiworldgov.com/ OCT 28-30 2020 at DC 1 mile from White House? Attendees are China European Union and few other nations head ? OCT 28-30 2020 date has been changed due to CORONA ?
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