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Iraqi Oil Exports to Jordan Resume: A Closer Look at Trade, Value and Future Prospects, 2 OCT

 Iraqi Oil Exports to Jordan Resume: A Closer Look at Trade, Value and Future Prospects, 2 OCT

The Iraqi Oil Marketing Company (SOMO) has recently revealed that the average price of crude oil exported to Jordan was $78 per barrel in September. This figure is $14.05 less than the official selling price, indicating a significant discount in favor of Jordan. The total oil exports to Jordan for the month reached 449,423 barrels, averaging 15,000 barrels per day, and amounted to approximately $35 million in value. The resumption of oil exports follows a memorandum of understanding for crude oil supply between the Iraqi Ministry of Oil and the Jordanian Ministry of Energy and Mineral Resources, which was approved by the Iraqi Cabinet in March 2023.

A History of Oil Trade between Iraq and Jordan

Historically, Jordan has depended on oil supplies from Iraq to meet a portion of its domestic demand. In September 2021, Jordan began receiving oil shipments from the Kirkuk fields under an agreement to purchase 10,000 barrels of crude oil daily. However, this supply was halted in February 2022 due to the expiration of the contract, only to resume in April, pause again in August, and then resume once more in September 2022.

(Also Read: Turkey’s Possible Transfer of Advanced Drones to Ukraine: A Shift in Military Power Dynamics )

The Iraqi Cabinet’s approval of the memorandum of understanding signifies an extension of this agreement set for one year, effective from its implementation date. The two countries have since reached an agreement to increase monthly oil imports to 450,000 barrels from the previous 300,000 barrels. Iraq facilitates these exports through tanker trucks, delivering approximately 15,000 barrels daily.

The Impact of Oil Trade on Jordan’s Economy

The resumption of oil imports from Iraq has significant implications for Jordan’s economy. The quantity of oil imported from Iraq constitutes about 7% of Jordan’s needs for crude oil. The discounted rate at which Iraq sells its crude oil to Jordan ($78 per barrel, as opposed to the official selling price of $92.05) represents a substantial economic benefit for Jordan. It is estimated that Jordan makes about $25 million in revenues each year due to this discount.

Future Prospects

Looking forward, the continuation and potential expansion of this oil trade agreement between Iraq and Jordan could have considerable economic and political implications. It not only strengthens the bilateral ties between the two countries but also aids in increasing the value of trade between them. This agreement also represents a strategic move for Iraq, which needs to diversify its export outlets. Jordan offers a reliable and stable partner in this regard.

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Furthermore, the potential implementation of the Iraq-Jordan Export Pipeline, a project that has been proposed since 1980, could further increase the capacity for oil trade between the two countries. This pipeline, stretching from Basra in Iraq’s southernmost tip to Jordan’s Red Sea Port of Aqaba, can transfer around 1 million barrels a day, significantly boosting the volume of oil trade.

As the dynamics of global oil trade continue to evolve, the relationship between Iraq and Jordan in this sector will undoubtedly remain a key focus for policymakers, analysts, and industry stakeholders.

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Surge in US Dollar Value Against Iraqi Dinar: A Turning Point for Iraq’s Economy, 2 OCT

 Surge in US Dollar Value Against Iraqi Dinar: A Turning Point for Iraq’s Economy, 2 OCT

The US dollar has seen a significant surge in its value against the Iraqi dinar, a trend observed in both Baghdad’s central forex markets and the Kurdistan region. This development has sparked concerns over the potential impact on ordinary Iraqis, already burdened by a fragile economy, and has brought into sharp focus the country’s financial interactions with neighboring Iran.

The Escalating Exchange Rate

The dollar’s exchange rate against the Iraqi dinar has been on an upward trajectory recently. In Baghdad’s al-Kifah and al-Harithiya Central Exchanges, the dollar traded at a rate of 156,150 IQD for 100 dollars, a noticeable increase from the previous rate of 155,700 IQD. In the parallel markets in Baghdad, the selling and buying rates of the dollar were pegged at 157,000 and 155,000 IQD for 100 dollars, respectively. Similarly, in Erbil, the capital of the Kurdistan region, the dollar’s selling and buying rates were at 156,250 and 156,150 IQD for 100 dollars, respectively.

Underlying Factors

The rise in the dollar price started shortly after the new government assumed office in late October of last year. During the previous regime, the rate was relatively stable, hovering between 1,450 to 1,470 dinars to the dollar. The sudden surge has been attributed to the alleged smuggling of U.S. dollars or illegal transfers from Iraq to Iran during the term of the new government, comprised primarily of militias and political groups close to Iran.

Iran, currently grappling with a severe economic crisis due to sanctions, has seen the U.S. dollar’s value against the Iranian rial reach an all-time high. Iraq’s regular imports of gas and electricity from Iran, exempt from U.S. sanctions, are paid in Iraqi dinars to accounts in Iraqi banks owned by Iranians. Given the current circumstances, Iran needs U.S. dollars to control rising prices and stabilize its economy, which has resulted in the illegal trafficking of U.S. dollars. However, the smuggling of currency is not confined to Iran, with Iraqi militias reportedly smuggling money to Syria and Turkey as well.

Policy Measures and Implications

To combat this issue, the Iraqi central bank has prohibited four Iraqi banks from using U.S. dollars. These include Al Ansari Islamic Bank for Investment and Finance, Al Qadhaf Islamic Bank for Finance and Investment, Asia Iraq Islamic Bank for Investment and Finance, and the Iraqi Middle East Investment Bank. The central bank is also auditing several other banks and financial organizations in an attempt to halt the illegal use of dollars in Iraq.

While these measures are aimed at curbing illicit financial activities, they might inadvertently affect the functioning of the Iraqi banking sector and the broader economy. The escalating exchange rate has triggered protests in Iraq, with citizens demanding a reduction in the dollar price. They argue that the rising dollar rate has led to an increase in the prices of commodities, including food products, thereby escalating the cost of living in Iraq.

The Iraqi government has responded by raising the value of the Iraqi dinar against the U.S. dollar to limit the impact of the dollar’s appreciation on Iraqi citizens. However, the effectiveness of this measure remains to be seen.

Looking Ahead

The rising dollar’s exchange rate against the Iraqi dinar presents a complex challenge for Iraq’s economy. It underscores the need for stringent financial regulations to curb illegal activities and maintain economic stability. At the same time, it highlights the importance of geopolitical considerations in the country’s economic affairs, particularly its financial dealings with Iran.

As Iraq navigates this economic conundrum, the government’s policy measures and their implications will be closely watched by domestic and international stakeholders. The way forward requires a delicate balance of strong economic governance, regulatory compliance, and geopolitical diplomacy to ensure the stability and prosperity of Iraq’s economy.

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"RV UPDATE" BY FRANK26, 2 OCT

  Frank26

   The WTO...you don't have to have a high exchange rate.  But what do you have to have in order to be part of the WTO?  Your currency must be what?  Sanction free.  There must not be any restrictions on your bank or your currency to join the WTO.

  A program rate is not a stable controlled exchange rate.  They are saying things are different now.  They are secure and stable.  We do have international standards established...

  What was the rate the Kuwait dinar came out at in 1999?  It was a ridiculous rate.  They came out huge!  ...I don't care what they [Iraq] comes out at.   What I care about is are you restriction free?  Are you sanction free?  When you went to the UN I know what you did - You're free!

Question: "Is Article VIII needed?"  Article VIII will automatically come on once Article VII is official.  In other words it's the next step that they walk into under the United Nations Security Council.

 I don't care if they come out at 1132.  I don't care if they come out at $0.10.  I don't care if they come out at $0.50.  You think it's going to stay there for long when the world is wanting to pour in?  Whatever the rate is they come out at, in a blink of an eye - bam, you better know when to hold'm and when to fold'm.

Iraqi Prime Minister to Attend Doha Expo 2023-2024: A Global Confluence of Green Innovation, 2 OCT

 Iraqi Prime Minister to Attend Doha Expo 2023-2024: A Global Confluence of Green Innovation, 2 OCT

Prime Minister Mohammed Shiaa Al-Sudani of Iraq is set to attend the grand inauguration of Expo Doha 2023-2024 in the capital city of Qatar. The highly anticipated International Horticultural Expo will commence on October 2nd, 2023, and conclude on March 28th, 2024. Under the theme ‘Green Desert, Better Environment,’ the Expo aims to encourage the global community to embrace innovative solutions to combat desertification and promote a greener, more sustainable future.

A Celebration of Green Innovation

Expo Doha 2023-2024 is ready in every aspect to deliver a memorable and enlightening experience for its attendees, from the participating countries to the numerous volunteers who have come forward to assist. The Organizing Committee of the Expo has received an overwhelming number of applications for volunteers both locally and abroad, with many individuals who volunteered in FIFA World Cup Qatar 2022 also expressing interest in participating in the Expo.

Over 80 countries, including all Gulf Cooperation Council (GCC) countries, will have their own pavilion and garden at Al Bidda Park, the site of Expo Doha 2023-2024. The Expo is designed in alignment with the guiding principles of Qatar National Vision 2030, putting environmental management and sustainable development at the core of its mission. The Expo is expected to draw more than three million visitors over its 179-day run.

Experiences and Highlights of the Expo

Expo Doha 2023-2024 is set to be a global confluence of ideas, cultures, and innovation. Guests will have the opportunity to visit ornamental gardens, attend public debates, conferences, live shows, and enjoy art and culinary performances. The Expo will be the first A1 International Horticultural Exhibition held in the Middle East and North Africa region.

Situated in Al Bidda Park, spanning 1.7 million square meters and facing the azure waters of the Arabian Gulf, the Expo is sure to provide an immersive and aesthetic experience for its visitors. The Expo will draw international visitors and organisers from 80 countries, private sector representatives, non-governmental organisations, and the general public.

The theme of Expo Doha 2023-2024, ‘Green Desert, Better Environment,’ is particularly significant. It aims to inspire attendees to embrace sustainable innovation and reduce desertification. This theme engages visitors physically, intellectually, and emotionally, encouraging them to be part of the change towards a more sustainable future.

Inauguration and Partnerships

The grand inauguration of the Expo has already sparked excitement among its strategic partners. Qatar Airways, a strategic partner of the Expo, has announced a dazzling livery for Doha Expo 2023. His Excellency Mr. Akbar Al Baker, Group Chief Executive of Qatar Airways, embellished an A330-300 aircraft with the EXPO 2023 livery at Hamad International Airport, marking Qatar Airways and Hamad International Airport’s strategic partnership with the six-month event. Several high-profile dignitaries attended the event, enhancing its significance.

Qatar Airways will also offer enhanced in-flight Expo-themed experiences, featuring over 30 gardening-related shows in flight starting from October 11, 2023. The airline will feature the Qatar Airways Garden, which will highlight the theme of the Expo and provide a memorable horticultural experience for passengers.

Looking Ahead

The Expo aims to be more than just a grand event; it strives to be a beacon for environmental progress and sustainable development. With esteemed partners like Qatar Airways, the Expo is poised to deliver an experience that resonates globally and inspires positive change. The Expo will not only represent a celebration of joint efforts but also serve as a powerful symbol of ongoing environmental stewardship in the region.

In the wake of the global challenges faced due to climate change, events such as Expo Doha 2023-2024 provide an opportunity for nations to come together to discuss and devise innovative solutions for a sustainable future. The Expo promises to be a significant milestone in the journey towards a greener and more sustainable world.

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Iranian Company Resumes Sewage Network Construction in Shatra, Iraq, After 12-Year Hiatus, 2 OCT

 Iranian Company Resumes Sewage Network Construction in Shatra, Iraq, After 12-Year Hiatus, 2 OCT

After a hiatus of 12 years, the Iranian company, Omar Ab, has resumed construction on a sewage network project in the Shatra district, north of Dhi Qar, Iraq, according to a local official. The project, initially assigned to the Iranian company in 2011, was paused in 2014 due to the war against ISIS. After resuming the project two years ago, the company has faced public dissatisfaction due to slow progress. However, the completion rate of the work has now reached 94% in the stations, though the integral sewage network in the streets of Shatra continues to face delays. 

Overcoming Sanction Hurdles

To bypass the US sanctions imposed on Iran and its companies, the federal government in Baghdad has incorporated an Iraqi partner into the project. The inclusion of a local partner is part of the government’s strategy to pay the company’s dues, thereby circumventing the US sanctions on Iran and its firms. This move underscores the complexities of international politics and the ways in which they can influence local development projects. 

Project’s History and Current Status

The sewage network construction project in Shatra was originally assigned to Omar Ab in 2011. However, the rise of ISIS in 2014 led to a halt in operations. The company finally resumed work two years ago, but progress has been slower than anticipated, leading to public discontent and repeated calls for the contract to be terminated. 

Despite the challenges, the project’s completion rate is currently around 94% in the stations. However, the essential sewage network in the streets of Shatra is still experiencing delays. As per the local official, the slow progress has sparked public discontent, leading to calls for the contract’s termination. 

Implications and Future Outlook

The resumption of this project marks a significant step in infrastructural development for the Shatra district. The successful completion of the sewage network would undoubtedly improve sanitation conditions, thereby enhancing the quality of life for local residents. However, the ongoing delays and slow progress pose a significant challenge to this goal. 

Moreover, the manner in which the government and the company have navigated international sanctions to continue the project provides a fascinating case study in the interplay between international politics and local development. The addition of an Iraqi partner to bypass sanctions demonstrates a strategic approach that could potentially be replicated in other similar contexts.

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WTO Accession = New Rate?💣IQD = $0.50 - S0.60!?🤔Iraq Dinar RV Updates | ...