Does The Fluctuation Of Oil Prices Affect Iraq's Budget? A Government Advisor Responds
Time: 11/19/2023 Read: 442 times {Economic: Al-Furat News} The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, said that the general financial trend for the year 2023 is “towards the upside” despite the fluctuation in oil prices.
Saleh told {Al-Furat News} agency, "The fluctuation of oil prices between rise and fall and its impact on the budget deficit. We find that this depends on the annual average revenues from a barrel of oil from the same source."
He stated, “The result of this impact on the total revenues of the annual general budget is that price fluctuations will certainly occur that fluctuate between rise and fall, but the general trend in 2023 is towards the rise.”
Three OPEC+ sources told Reuters that the group is scheduled to consider whether to make an additional cut in oil supplies when it meets later this month, after prices fell about 20% since late September.
The price of Brent crude fell to about $80.6 per barrel from the highest level in 2023 recorded in September, near $98. Concerns about demand and a potential surplus next year have put pressure on prices, despite support from OPEC+ cuts and conflict in the Middle East.
Saudi Arabia, Russia and other OPEC+ members have already pledged to reduce overall oil production by 5.16 million barrels per day, or about 5% of daily global demand, in a series of steps that began in late 2022. The cut includes 3.66 million barrels per day from OPEC+. In addition to a voluntary reduction from Saudi Arabia and Russia.
On June 12, the House of Representatives approved the largest draft budget law in the country’s history for the current year, with a total amounting to 198 trillion and 910 billion dinars ($153 billion), while the total state revenues under the draft law amounted to 134 trillion and 552.9 billion.
The fiscal deficit amounts within the budget law were estimated at more than 64.36 trillion dinars, at record levels amounting to more than two-thirds of the last deficit witnessed by Iraq’s budget recorded in 2021. Iraq relied heavily,
in its recently approved budget, on oil revenues, which within the law amounted to approximately 117.2 trillion dinars. While the total non-oil revenues amounted to about 17.3 trillion, which means that the Iraqi budget has become hostage to international oil prices, as the price of a barrel of oil was estimated at 70 dollars, and the amount of daily exports is 3.5 million barrels per day, of which 400 thousand barrels per day are from the Kurdistan region of Iraq and are suspended. Since last March due to a dispute with Turkey. Raghad Dahham LINK
