Iraq-Turkey Oil Pipeline: Uncertainty Looms Over Resumption of Operations, 8 OCT

 Iraq-Turkey Oil Pipeline: Uncertainty Looms Over Resumption of Operations, 8 OCT

Recent reports indicate that a cloud of uncertainty hangs over the resumption of operations of the Iraq-Turkey oil pipeline. This skepticism stems from the fact that Iraq has not yet received any formal notification from Turkey regarding the operation of the pipeline that brings crude oil from Iraq to global markets. The report, according to two senior oil officials in Iraq, raises speculation about the pipeline’s operational status.

A Dispute in Suspension

The pipeline’s operation was suspended six months ago due to a payment dispute between Turkey and Iraq. Turkey’s Energy Minister, Alparslan Bayraktar, had announced that operations on the oil pipeline would restart this week. However, the lack of formal notification from Turkey to Iraq suggests that the pipeline may not be operational yet.

The pipeline is expected to supply half a million barrels of crude oil to global markets. Turkey halted flows on the pipeline after an arbitration ruling ordered them to pay damages for unauthorized exports. Following this, Ankara initiated maintenance work on the pipeline, which contributes to approximately 0.5% of global crude supply.

Implications for Global Oil Supply

The pipeline’s uncertain operational status has implications for global oil markets. The Iraq-Turkey pipeline is a significant conduit for Iraq’s crude oil exports and contributes to global oil supply. Any delays or disruptions in its operations could potentially impact global oil prices and supply dynamics.

The lack of a formal notification about the pipeline’s operational status fuels these uncertainties. Until such notification is received and confirmed by Iraqi officials, questions about the pipeline’s operational status will remain, casting a shadow over its expected contribution to global crude supply.

Looking Ahead

The situation surrounding the Iraq-Turkey pipeline serves as a reminder of the complexities involved in international energy trade. Disputes between countries can have far-reaching implications, impacting not just bilateral relations but also the global energy market.

For oil-dependent economies like Iraq, ensuring the smooth operation of export pipelines is critical. Therefore, the resolution of the current situation will be closely watched by stakeholders in the energy sector.

As stakeholders await further developments, the situation underscores the importance of transparent and effective communication in global energy cooperation. The absence of formal communication between Turkey and Iraq in this case has only served to amplify uncertainties, demonstrating the need for improved dialogue and information-sharing practices in such critical matters.

https://bnn.network/world/turkey/iraq-turkey-oil-pipeline-uncertainty-looms-over-resumption-of-operations/

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The euro is the key to resolving the dollar crisis in Iraq, 8 OCT

 The euro is the key to resolving the dollar crisis in Iraq

 The euro is ranked second in the world after the US dollar, as it is considered one of the strong currencies in international trade. The euro is also the second most traded currency in the world after the US dollar, and the British pound is ranked fourth. 

The Central Bank of Iraq is supposed to take the first step by diversifying its financial assets and increasing the share of the euro, in addition to the pound sterling, at the expense of the US dollar, as the Central Bank of Iraq’s foreign currency reserve is estimated at approximately 113 billion dollars.

The Central Bank of Iraq keeping a portion of its reserves in euros will not have any negative impact on the value of the Iraqi dinar, but it will preserve its value. An example of this is the Kuwaiti dinar, which is denominated against a basket of foreign currencies such as the dollar, euro, and pound sterling. 

The Central Bank of Iraq could have pumped the euro currency into the currency sale window auction, after the strict measures imposed by the US Federal Reserve Bank and the US Department of the Treasury on the Central Bank of Iraq by selling the US dollar currency, with the aim of preventing the smuggling of the dollar into Iran, and therefore The goal of selling the euro in the currency selling window is to avoid the restrictions imposed on the Central Bank of Iraq by the US Treasury, and also to reduce the demand for the US dollar with the aim of reducing the gap between the official rate and the exchange rate in the parallel market.

The Central Bank of Iraq was supposed to establish its own platform, as this platform specializes in selling the euro and the pound sterling, and it can also be sold to citizens in cash, just as the euro is a global currency that the Iraqi merchant can deal with normally and smoothly in any country. It excluded Iran, so some foreign imports could be covered through euros instead of dollars. 

Although I am against the idea of giving each citizen 3,000 US dollars to travel and smuggling hard currency out of the country, but at the same time, if the Central Bank of Iraq continues this policy, I suggest giving citizens the euro as well to travel outside the country in order to reduce the demand for the dollar. American. 

Hoarded money:

In order to be realistic, unfortunately, there is a large percentage of the Iraqi people who save their money in the US dollar currency at the expense of the Iraqi dinar, and therefore it is very important to instill a culture of saving or trading in the euro instead of the US dollar among the citizens, in order to reduce the demand for the dollar by the citizens. Those who save their money in US dollars, and this will also aim to withdraw the dinar block from the funds hoarded by citizens, because the Iraqi government has a scarcity of the Iraqi dinar due to the explosive budget, specifically in operational expenses, and it is expected that there will be a deficit in the coming period in paying employees’ salaries. By the Iraqi government, because the dinar block at the Central Bank of Iraq is unable to cover operating expenses, which forces the Central Bank of Iraq to print the dinar, and this in itself is considered a great danger to the value of the Iraqi dinar and the high rate of inflation, and thus its consequences will be serious and negative forIraqi economy. 

Euro is an investment currency:  

The euro is considered an investment currency because it generally moves in an upward direction in the long term, as it rose from the end of last year from levels of 0.96 cents to 1.12 US dollars two months ago, meaning an increase of approximately more than 15%, and the euro currency is currently in the process of a deep correction as it has declined. To a level of approximately 1.04 US dollars several days ago, and now it is reeling at levels of 1.05 US dollars, and perhaps the rise will resume or the correction will be completed to levels close to the parity point with the dollar, and this in itself is considered an appropriate opportunity for the Central Bank of Iraq to buy the euro currency at a value of 10. One billion euros at the very least, and I personally saved part of my money in the euro currency, and it is expected that the euro currency will target levels of 1.15 US dollars and more during the first quarter of next year. 

In the event that the Central Bank of Iraq sells part of the currency sale window auction in euro currency, a month worth two billion euros, that is, selling 100

Suppose that the Central Bank of Iraq pumped the euro currency into the markets when it was at a price of 0.96 cents at the end of last year, at the time when the dollar crisis began in Iraq, which resulted in reducing the gap between the official rate and the exchange rate in the parallel market very significantly, and at the same time achieved... Citizens who bought the euro at the time gained an estimated 15% profit. 

Also, at the same time, the Central Bank of Iraq could have invested in the euro if it had kept part of its euro currency reserves, assuming 10 billion euros and sold it when it reached $1.12. It would also have achieved profits of an estimated 15%, or about 1.5 billion.

The question here is: Is the Central Bank of Iraq able to transfer part of its assets from the US dollar to the euro? 

Or will he be a prisoner of the directions of the US Treasury and the policy of the US Federal Reserve?  link

Foreign” banks and “fake” transfers... Parliament Finance reveals new details about the dollar crisis , 8 OCT

 Foreign” banks and “fake” transfers... Parliament Finance reveals new details about the dollar crisis

10/7/2023

On Saturday, the Finance Committee in the Iraqi Parliament entered the crisis of the cash dollar scarcity expected in the country at the beginning of the year 2024, after the Central Bank’s decision, while it talked about “foreign” banks controlling the currency auction.  

Committee member Muhammad Nouri told Shafaq News Agency, “There are a number of banks that control the window for buying and selling foreign currency, and they are non-Iraqi banks, and the conditions set by the Central Bank are applied to a pre-specified group before it sets conditions on the banks or companies so that they are The sole controller of the foreign currency buying and selling window.”

Nouri added, “Most financial transfers are (fake) under the pretext of purchasing goods, and here is an indication of the delay in real transfers, given that the fake transfers are supported and backed by a political group and armed factions affiliated with the economic parties.”

Nouri added, "But personal transfers for the purpose of study and treatment outside the country and simple trade, we find that they are real, but large transfers are not real because they are affiliated with the economics of the parties, and their purpose is to smuggle currency outside the country."

Despite these developments, the Central Bank of Iraq confirms that dollar deposits are guaranteed, and the citizen who deposited his money in dollars with any Iraqi bank previously or by 2024 has an inherent right to receive these amounts in cash and in US dollars.

The Central Bank had indicated that the reforms it is undertaking aim to achieve compliance of the bank and the Iraqi banking system in general with international compliance standards, thus preventing the dollar from reaching parties prohibited from obtaining it or speculating with it.   LINK

Expecting Announcement?💣Is it a Go This Weekend!?🤔Iraq Dinar RV Updates ...

"RV UPDATE" BY JEFF, 8 OCT

 Jeff 

 The budget remains unapproved right now.  The budget is not approved because of something they did to the budget specifically in the month of September [Amended it].  Prior to this event in September the budget was approved.  They did something specifically in September making the budget unapproved...Parliament still has to approve the budget again.

A very very very important article came out... "Iraq prohibits cash withdrawals in dollar in early January 2024"  This is either very very extremely good new or very extremely bad news... Quote: " The country will ban cash withdrawals and transactions in dollars starting from January 1, 2024 in the latest effort to limit the misuse of the country's hard currency reserves in financial crimes"  Again this is either very bad news or very good news.  If you receive it as good news it has nothing to do with the rate change specifically in the month of January.  The rate is not changing in January.

Article:   "The American decision still dominates Iraq.  What do we need to get rid of it?"  The United States still has possession and control over all of Iraq's OPEC dollars in Washington DC.  Quote:  "America is putting pressure on Iraq because it has not completely emerged from the UN resolutions..."  Those are the U.N. Chapter 7 sanctions.

Iraqi finance committee raises concerns over dollar scarcity and foreign banks' influence, 8 OCT

 Iraqi finance committee raises concerns over dollar scarcity and foreign banks' influence, 8 OCT

Shafaq News/ Iraq's parliamentary Finance Committee expressed concerns about the looming scarcity of cash dollars in the country, expected at the beginning of 2024 after a decision made by the Central Bank. The committee cited the influence of "foreign" banks in controlling the currency auction, creating challenges in the market.

Committee member Muhammad Nouri revealed to Shafaq News Agency that several non-Iraqi banks dominate the buying and selling of foreign currency. He emphasized that the Central Bank's stringent conditions are applied to a specific group before being extended to other banks or companies, effectively giving these foreign banks significant control over the primary window for foreign currency transactions.

Nouri highlighted a prevalent issue where most financial transfers are fake, often claimed to be for purchasing goods. 

He noted that these illegitimate transfers cause delays in genuine transactions. He pointed out that these counterfeit transfers receive support from political groups and armed factions associated with economic parties.

However, the Central Bank of Iraq has reassured citizens that dollar deposits are secure. Individuals who deposited their money in dollars with any Iraqi bank before 2024 are guaranteed the right to receive these amounts in cash and US dollars.

The Central Bank clarified that its ongoing reforms aim to align the bank and the broader Iraqi banking system with international compliance standards.

https://shafaq.com/en/Iraq-News/Iraqi-finance-committee-raises-concerns-over-dollar-scarcity-and-foreign-banks-influence