The erosion of oil prices .. the reality of budget puts Iraq on soft ground
Editor Hossam al-Khafaji, Duraid Salman - Tuesday 25 August 2015
13:17 makes the erosion of oil prices, the Iraqi budget soft ground and threatens crisis looming, especially with the presence expectations coughed the arrival of a barrel of oil to around $ 20, which means entering the country in economic trouble, anxiety and anticipation should be to confront it.

Hopes brought by a simple improvement in the price of a barrel of oil during the first months of this year, dissipated after the decline in the price of Brent crude to $ 45 per barrel, a drop by nearly 60% from what it was last summer, while the oil ministry predicted increase Price wasteful erosion of prices concerns.

The drop in oil prices, "a big problem" for Iraq, according to specialists, the fact that the country depends on oil revenues, mainly as a source of income, while facing major internal challenges of Baktale with organizing "Daash," Moreover, the need to provide the necessary funds for basic services The grumbling source community.

A possible decline threatens salaries

Says the Commission on oil and energy parliamentary member Jamal Muhammadawi in an interview with Alsumaria, that "the price of oil in a steady decline, and the price per barrel up to twenty dollars," warning that "the Iraqi government will suffer in this case of a real financial crisis will not be able even to pay employees' salaries ".

Muhammadawi explains, that "the budget of Iraq Finance for the current year was built on the basis of $ 56 per barrel of oil, while Iraq sells a barrel of oil sells for about $ 34."

.. About the budget is less than the current text

President of the Economic Media Centre lion Muhammad Ali is expected to decline in the next budget for Iraq in 2016 to less than half of the current year's budget, noting that it "would be between 40-45 billion at best with a deficit."

See Ali in his speech Sumerian's News, that "next year's budget will be operational and the disposal to pay salaries," pointing out that "oil prices are open to all possibilities, because of the large surplus in the supply of $ 3 million barrels per day and refused to producers cut production ceilings."

The economic expert on behalf of Jamil Antoine, says in an interview with Alsumaria's News, said that "the political game of some countries and the recession that the world factors influential seen in the decline in oil prices," expected "continued decline in these prices over the next month, for up to US $ thirtieth threshold per barrel." .

Explains Antoine, that "the recession witnessed by the world, especially in Southeast Asia and in particular China, weaker demand for oil, which led to the drop in oil prices," noting that "there is also a political game of some countries to keep prices low in order to storage and take advantage of This energy at the lowest prices. "

Antoine shows that "the government will find itself facing a big challenge over the next year to the need to provide a full operating budget, and the provision of private funds to fight al Daash, as well as other domestic and international obligations."

2016 budget "conservative"

He says Prime Minister for Economic Affairs Adviser to the appearance of Mohammed Saleh in an interview with Alsumaria's News, "The Ministry of Finance will submit a draft of the 2016 budget in cooperation with Iraq partners of the World Bank and the IMF to the Cabinet," explaining that "estimates of the budget be conservative, rational and non-payments basis In which".

Saleh explains, that "the Council of Ministers will be the adoption of number to the price of oil is close to reality and will focus expenditures on this number while seeking to maximize revenue from other places, as well as seeking to cut costs that were not a priority."

Oil: we are committed to our pledges

Oil Ministry confirms its commitment to its obligations with foreign oil companies operating in the oil fields in spite of lower oil prices.

According to the official, ministry spokesman Assem Jihad told Alsumaria's News, "The ministry took into account through contracts with international oil companies operating in the fields of Iraq all the surrounding oil market conditions of contracts," stressing that "Iraq is committed to its obligations with these companies and that the ministry to continue with these companies to discuss any new developments in the oil market. "

Explains Jihad, that "OPEC experts and experts on the subject of oil assert the existence of demand for the purchase of crude oil is an opportunity for them to store and purchase, and therefore, they expect to increase these prices to reach the end of this year and early next year to more than $ 60 per barrel, ruling out what some see as Stthaoy of prices to $ 20 per barrel. "

The Ministry of Planning predicted on Saturday (August 1, 2015), a decline in economic growth to 1% of Iraq, noting that the decline in oil prices have a negative impact on the economy, as demanded reconsideration of projects and prioritization of them.

And it landed contracts futures for Brent and US crude, on Monday (August 24, 2015), the lowest level in six and a half years ago to less than the latest support for two level of $ 45 a barrel and $ 40 a barrel in the order as a result of investors' sense of concern that a slowdown in the Chinese economy weakens demand amid a global glut of oil supply.