ENERGY EXPERT CALLS FOR IRAQ TO BE FREED FROM OPEC DEAL AS OIL PRICES FALL
Energy expert, Nabil Al Marsomi, called for Iraq to be freed from the OPEC agreement with the decline in oil prices.
Al-Marsoumi said, during his appearance on the {Free Talk} program broadcast by Al-Furat satellite channel this evening, that: “Iraq is still suffering from a single income, as 89% of its revenues depend on oil, despite achieving partial development in non-oil revenues that amounted to 14 trillion dinars until last October,” noting that “these revenues are insufficient and still ineffective.”
Al-Marsoumi explained that “oil remains the main driver of the Iraqi economy, and that economic reforms are slow and ineffective in the general budget, which needs to be restructured by reducing and rationalizing spending.”
He pointed out that “liberating Iraq from OPEC Plus restrictions could add 650,000 barrels per day to production, which could compensate for part of the decline in oil prices,” warning of “the decline in cash reserves in the Central Bank of Iraq, which could affect the exchange rate of the dinar.”
Al-Marsoumi believes that “Iraq is facing developments in the global oil market in 2025 that may be negative, which necessitates strengthening the position of the oil sector as a starting point for economic reform, and that economic development depends on reviving the private investment sector.”
Regarding 2024, Al-Marsoumi stated that “the average price of a barrel of oil sold was $74, and despite that, the budget witnessed an actual deficit of 19 trillion dinars, most of which was covered by internal borrowing that amounted to 13 trillion dinars, bringing the total internal debt to 83 trillion dinars at the end of December.”
He added that “current shale oil production has a low extraction cost of $27 per barrel, which allows a wide margin for oil prices to move,” expecting that “prices will drop to $55 per barrel, which will put Iraq in front of difficult choices, and it may be forced to reduce the value of the Iraqi dinar if prices reach $60 per barrel.”
He also pointed out that “the Federal Court’s decision regarding the region’s oil will have a positive impact on government revenues, and the region’s current contracts with foreign companies are not a partnership but rather a participation, where foreign companies bear the financing and risks in exchange for 40% of the oil to cover the cost,” calling for “joint management of the oil fields between the region and the federal government as an optimal solution.”
Regarding the future of the relationship between the region and the center, Al-Marsoumi stressed that “all the problems between them will end with the approval of the oil and gas law, but solutions are still far-fetched.”
He revealed that “Iraq sells a barrel of black oil to the Emirates at a price of $40, which constitutes a huge loss in light of the decline in oil prices.”
Al-Marsoumi concluded his speech by pointing out that “the pressures exerted by former US President Donald Trump aim to reduce oil prices to $70, which may further complicate Iraq’s economic situation.”
