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FRANK26: "NO NEED... WE HAVE ASSETS UP TO THE ASSETS LOL !!!".....F26
Will the price of oil be adjusted in Iraq's 2025 budget?
4/24/2025
The Parliamentary Finance Committee ruled out any amendment to the price of a barrel of oil approved in the general budget.
This comes one day after Prime Minister Mohammed Shia al-Sudani confirmed that the government had arranged the spending mechanism according to the principle of priority, with positive results achieved in many sectors.
Committee member Jamal Koujar said, "The price of a barrel of oil approved in the budget will not change, because any change requires a comprehensive revision to the budget structure, which means an increase in the deficit, which is already suffering from significant inflation."
Kocher explained that "reducing the price of a barrel would mean one of two things: either increasing the deficit, which is not possible under the current financial situation, or resorting to deleting many important items from the investment budget, which would harm development plans."
He added, "If the government adopts a price of $70 per barrel, it will justify Iraq's sale below the global price, which gives it flexibility in managing its approved expenditures."
Kocher pointed out that "the oil market remains unstable, and no one knows whether the negotiations being conducted by the administration of US President Donald Trump with Iran will lead to a revival of the oil market and a rise in its prices."
Meanwhile, Member of Parliament Rebwar Orahman confirmed that "the decline in global oil prices will not significantly impact the general budget at the present time," noting that "the government remains in control of the financial situation, particularly with regard to securing employee salaries."
"The government has not yet sent the budget tables to the House of Representatives, (AND WE KNOW WHY... TO PROTECT THE EXCHANGE RATE -F26) and we are awaiting this step to determine the exact figures," Orahman said, noting that "the current decline in oil prices has not yet reached the stage of having a significant impact, unless the price of a barrel falls to $50, in which case the budget could be affected."
He explained that "the situation is currently under control by the government, which is closely monitoring developments in the global market and awaiting external economic changes before taking any steps." He noted that "legally, the government can reduce the budgeted oil price to $60, but this will lead to an increase in the deficit, especially since the deficit is already present and planned for. If oil revenues decline, the deficit will be real."
The MP stressed that "the government is focusing heavily on ensuring salaries and has so far succeeded in securing them in full, which is an indication that the financial situation remains under control."
He pointed out the need to "monitor developments in global markets and take appropriate measures accordingly, to maintain the stability of the country's economic situation."
In a previous interview, the Prime Minister's Financial Advisor, Mazhar Mohammed Saleh, said, "There is a precise technical hedge to confront the oil asset cycle, which the legislator assumed when approving the three-year federal general budget (Law No. 13 of 2023, as amended). The hedge was to adopt a conservative oil price of $70 per barrel for exported oil, based on exporting 3.4 million barrels of oil per day." He explained, "This hedge includes spending within a comfortable budget, but at the minimum possible limit of 160 trillion dinars annually, instead of 200 trillion dinars annually."
Saleh continued: “If oil prices fall to an annual average of $60 – the maximum possible scenario in the 2025 budget – there are two options: either spending around 130 trillion dinars and maintaining the same deficit-to-GDP ratio as in 2024, or spending up to a ceiling of 156 trillion dinars and accepting actual borrowing in bonds that rises to 9 percent of GDP in order to secure salaries, wages, pensions, social care, support, and spending on service projects without interruption, taking into account the drop in oil prices and the double contraction in GDP growth.”
He stressed that "these are the expected possible options unless the oil asset cycle improves, which in any case depends on the upcoming OPEC+ policies regarding the future of production limits and the review of member quotas, as well as the development of the geopolitical situation in the world, especially in the Ukrainian-Russian war and the development of the situation in the Mediterranean Basin region, as the Gulf region is responsible for exporting approximately less than 40 percent of global crude oil exports, and the impact of this on energy price fluctuations in global markets, including crude oil markets."
