Plunging Oil Prices Jeopardize Iraq’s Budget: Will the Government Resort to Dollar Revaluation?
link this is from Kurdish news
Economic expert Ahmed al-Ansari noted that while Iraq’s reserve fund is generally safeguarded for emergencies, adjusting the value of the Iraqi dinar relative to the U.S. dollar remains a plausible option.
Iraq is bracing for renewed economic turbulence as oil prices fall below the critical $65 per barrel mark—five dollars short of the benchmark adopted in the country’s federal budget. The slide in global crude markets threatens to erode the very foundation of Iraq’s oil-dependent economy, prompting speculation over potential fiscal and monetary policy shifts.
The video for this My FX Buddies Blogpost is below here:
According to economic analyst Salah Boushi, the continued depreciation in oil prices could severely undermine the state’s ability to fund essential institutions and public services. “The longer this drop persists, the more pressure the government will face,” he told Kurdistan24. “A flexible, carefully calibrated strategy is imperative. Increasing oil production may become necessary to offset lost revenues.”
While some officials advocate for boosting output, others warn against hasty decisions involving Iraq’s monetary reserves. The central bank’s hard currency reserves, considered a last line of defense, are unlikely to be tapped under current circumstances. Still, one policy instrument remains within reach—and contentious: the exchange rate.
Economic expert Ahmed al-Ansari noted that while Iraq’s reserve fund is generally safeguarded for emergencies, adjusting the value of the Iraqi dinar relative to the U.S. dollar remains a plausible option. “We’re unlikely to see the reserves touched, but a revaluation of the dinar, coupled with domestic borrowing, could help bridge a potential deficit,” al-Ansari explained.
The recent price plunge has also sparked unconventional proposals. Some economists have suggested postponing monthly salary disbursements by an additional ten days—shifting from a 30-day cycle to 40—as a temporary measure to alleviate budgetary stress and delay liquidity shortfalls.
Iraq’s fiscal vulnerability is deeply rooted in its dependency on oil, which constitutes nearly 90% of national revenue. Any significant fluctuation in the global oil market poses a direct threat to the country’s financial stability. As prices continue to fall below projections, the government faces the unwelcome prospect of making “painful” adjustments that could directly affect ordinary citizens.
For Iraq’s population—already grappling with inflation and diminished purchasing power—the prospect of a revised exchange rate raises alarm. A stronger dollar would translate into more expensive imports, triggering a ripple effect on everyday goods and services.
With few viable alternatives in the short term, and in the absence of economic diversification, the Iraqi government may be forced to choose between austerity and structural reform—or risk spiraling into a deeper crisis.
Banking sector update
Iraq has recently witnessed significant improvements on the political, economic, and security fronts, which has had a positive impact on attracting foreign and Arab investments, particularly in the banking sector.
The increasing presence of foreign and Arab banks in the country is evidence of a recovering investment environment and reflects government efforts to enhance economic stability.
Among the most notable positive indicators that have contributed to strengthening the investment environment are regional and international cooperation and Iraq's openness to Arab and international countries. This has boosted investor confidence and encouraged Arab banks to expand their presence in Iraq, which is relied upon to provide advanced financial services, such as trade finance and Islamic banking, in addition to supporting the private sector and joint investments.
This step represents the optimal means for global integration through the entry of international banks, reflecting the return of investor confidence in the Iraqi economy.
Meanwhile, the Iraqi banking reform process, undertaken by the government to address the challenges facing the banking sector and keep pace with the digital age and international requirements, is proceeding along two parallel tracks. The first involves reforming private banks, led by the Central Bank, and ensuring compliance with international standards and the implementation of anti-money laundering and counter-terrorism financing requirements. This includes lifting the ban on dealing with Iraqi banks and cooperating with international companies to develop the technical infrastructure.
The second path is being adopted by the government to modernize state-owned banks, with support from the executive branch. This involves improving efficiency and adopting modern banking systems to reduce corruption, increase transparency, integrate with the private sector, and encourage partnerships between banks.
It's worth noting that there are obstacles hindering banking development, including bureaucracy, legal complexities, weak digital infrastructure in some local banks, and the need for qualified human resources to manage modern financial systems. This goal aims to create a modern banking system that supports the national economy. However, complete success requires accelerating reforms to ensure compliance with international standards, transforming Iraq into an attractive financial center that contributes to economic diversification and the creation of new job opportunities, thus strengthening its regional and international standing.
In any case, there is no alternative but to integrate with the global financial and banking climate, after comprehensive reform is completed, with the aim of creating a unified national banking market, directing banking credit towards investment, driven by the promising economic stability our country enjoys.
Iraq awaits economic breakthrough following US-Iran agreement
Amid the successive crises facing Iraq, the national economy stands on the edge of waiting and anticipation, searching for a glimmer of hope that will open windows of relief amid the blocked financial horizon and the tightening noose on the local market. Amid the anxiety of traders and the fear of consumers, the signs of the anticipated agreement between the United States of America and the Islamic Republic of Iran emerge as an opportunity that may carry within it the features of an economic breakthrough for Iraq, after years of suffering due to sanctions and regional tensions.
With every announcement or hint of progress in the negotiations, Iraqis' hopes are pinned on the possibility of liberating themselves from the shackles of complex transactions, and that this agreement will transform from a mere political card into a key to facilitating trade, ensuring stability, and protecting what remains of their purchasing power and economic capacity, which has been weakened by regional tensions.
Economic expert Nasser Al-Tamimi confirmed on Monday (April 14, 2025) that the expected agreement between the United States of America and the Islamic Republic of Iran will have economic benefits for Iraq.
Al-Tamimi told Baghdad Today, "The expected agreement between Washington and Tehran during the next phase is not only politically and security-wise important for Iraq, but also has economic benefits for Iraq. This agreement will lift some US sanctions against Iran, especially those related to the dollar issue. This may allow Iraq to conduct commercial transactions with Iran in dollars through official and legitimate means, and stop the black money transfers used by most traders."
He added, "Among these economic benefits is Iraq's continued import of gas and electricity without any American obstacles or impediments. Therefore, the anticipated US-Iran agreement is of great importance to Iraq. However, if no agreement is reached and the situation escalates between the two parties, Iraq will be the most affected by this."
With the escalation of talk about a possible agreement between Washington and Tehran, expectations are growing that some of the restrictions imposed will be eased. This could give Iraq a new opportunity to regulate its trade with Iran through official and legitimate channels, mitigate the impact of recurring energy crises, and restore some balance to the local market, which has been chronically constrained by these regional and international challenges.
News From the 14th
An expected nuclear agreement between Washington and Riyadh
US Energy Secretary Chris Wright revealed on Monday that the United States will soon announce details of a "historic" nuclear cooperation agreement with Saudi Arabia, stressing that the two sides are in an advanced stage of dialogue regarding the development of civil nuclear energy.
During his current visit to Riyadh, Wright said, "Developing nuclear energy is a priority for Saudi Arabia, which has already demonstrated significant success in this sector." He noted that the Kingdom possesses significant mineral resources, such as uranium, and aspires to expand its capabilities in the field of peaceful energy.
He explained that the United States, with its extensive experience in developing commercial nuclear energy technologies, looks forward to establishing a long-term strategic partnership with Saudi Arabia in this field, adding, "I am very excited about what this partnership can achieve, and we expect to announce more details later this year."
According to the US Secretary of State, Washington is preparing to sign a comprehensive energy cooperation agreement in the coming weeks, to be followed by a specific agreement on nuclear cooperation in the coming months.
According to observers, Wright's visit to Saudi Arabia reflects a renewed focus by US President Donald Trump's administration on strengthening strategic relations with the Gulf, particularly given that Trump's first foreign visit during his first term was to the kingdom.
Economist: The US price war aims to cover inflation, not boost the economy
Mustafa Hantoush, a researcher and expert in financial and banking affairs, confirmed on Monday that the price war launched by US President Donald Trump aims primarily to cover the inflation rates accumulated in the United States over the past years, and not to boost the US economy as it is being promoted.
Hantoush explained, in a statement to Al-Maalomah, that “the halt of major economies, especially China and Europe, from investing in US Treasury bonds directly contributed to the rise in inflation rates without this being matched by actual growth in the US economy.”
He explained that "the United States relies on printing dollars and covering them through global markets when its economy is growing, but in the event of a decline in growth, this causes an exacerbation of domestic inflation, which is what the current US administration is trying to address by attracting global companies to the US market."
He pointed out that "current policies aim to stimulate foreign and local capital to enter the US market as a means of reducing inflation, and are not the result of real strength in basic economic indicators." End
The 2025 budget is at the mercy of the oil market, and Parliament is awaiting the schedules.
Every year, Iraqis await the state budget like rain during a dry season, hoping it will bring them some promise of a less harsh life, services that preserve their dignity, and job opportunities that spare them the humiliation of poverty. But this wait has become exhausting, especially when figures are delayed and details are lost amidst the corridors of politics and market fluctuations.
Today, the story is repeated with the 2025 budget, which was supposed to reach parliament after the Eid holiday, but was delayed due to the decline in oil prices, the resource on which the country remains almost entirely dependent.
The government says it's in an unenviable position, and the Finance Committee confirms that the challenges are great, the deficit is growing, and while citizens sit on the sidewalk, surrounded by rising prices and poor services, the budget remains postponed, like many of the long-awaited dreams of Iraqis.
Member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, confirmed to Baghdad Today, Monday (April 14, 2025), that “the 2025 budget tables were scheduled to reach the House of Representatives after the Eid Al-Fitr holiday, but they have been delayed until now due to the decline and instability of oil prices, which has had a significant impact on the budget and its expenditures, as well as the deficit.”
He added that "the government is working to organize budget schedules in accordance with the changes in the global oil market, and therefore it may delay sending those schedules to the House of Representatives further until they are finalized in accordance with the new changes in the economic reality." He emphasized that "the government is in an unenviable position due to the decline in oil prices, which has significantly impacted financial allocations in the budget's spending headings."
In the same context, Jawad Al-Yasari, deputy chairman of the parliamentary committee for regions and governorates, revealed that there is a parliamentary movement to host a number of government officials to discuss the repercussions of the continued decline in oil prices on the country's financial and economic situation.
Al-Yassari told Baghdad Today, "The continued collapse of oil prices will have serious and major repercussions on the financial and economic situation in Iraq during the coming period, as Iraq depends on financing its budget by more than 90% through oil sales."
He added that "MPs from various political blocs took action during today's session and submitted requests to the parliament's presidency to host a number of government officials from the monetary authority to learn about the measures and steps being taken to secure the necessary funds in light of the collapse in oil prices," stressing that "Iraq needs clear, advance plans to confront any potential financial and economic challenges."
It's worth noting that the Iraqi government had set the current budget price at $70 per barrel, meaning that any significant decline in prices could cause a wide revenue deficit and present the government with difficult economic choices.
Despite repeated calls to diversify sources of income and revitalize non-oil productive sectors, such as agriculture, industry, and tourism, successive governments have failed to take tangible steps in this direction. This has led to a worsening financial deficit with each oil crisis, directly impacting service projects, salaries, and social programs.
Delays in budget approval have been a recurring phenomenon in Iraq in recent years, often attributed to political disputes or economic changes, disrupting the functioning of state institutions and delaying the implementation of development plans
OPEC raises production, Iraq is the most prominent violator
A Standard & Poor's Global Commodity Insights survey showed on Monday that OPEC+ production reached an eight-month high in March, amid a price collapse due to global trade tensions and its own plans to gradually raise quotas in the second quarter.
OPEC+ production rose by 30,000 barrels per day (bpd) month-on-month, reaching 41.04 million bpd in March. This increase is significantly lower than that recorded in February, when production rose by 440,000 bpd during the month, but it demonstrates the organization's continued efforts to implement production cuts.
OPEC+ producers with quotas pumped 319,000 barrels per day above their target in March, compared to an overproduction of 294,000 barrels per day in February.
Once again, Iraq and Kazakhstan, two countries with persistent overproduction, missed their production targets, with Iraq continuing to produce 4.07 million barrels per day for the second month, 70,000 barrels per day above its target.
Persistent overproduction was cited as one of the reasons why producers implementing voluntary cuts of 2.2 million barrels per day suddenly announced plans on April 3 to accelerate the easing of these cuts in the second quarter.
The coalition's top producers, Saudi Arabia and Russia, fell short of their target of 8.978 million barrels per day, producing 8.95 million barrels per day and 8.97 million barrels per day, respectively.
Iraq intends to purchase and manufacture 23 cruise ships.
The Ministry of Transport intends to contract for the purchase and manufacture of 23 different vessels and boats to support the river transport sector and stimulate its movement locally and internationally as part of a plan to revitalize the sector in the country.
The Director General of the Ministry's General Maritime Transport Company, Ahmed Al-Asadi, said his company intends to contract for the purchase of 15 tourist boats to activate the river taxi project, in conjunction with the Ministry's plan to develop the Corniche dock in Basra Governorate, which is currently being referred for implementation.
He added that his company is planning to build eight new vessels, and has submitted the project to the Cabinet Secretariat to obtain the necessary approvals. He revealed that the company has begun receiving offers from companies for the purpose of joint operation with the company's fleet for integrated transportation of various types of vessels. He pointed out that the completion of these contracts will complete the transportation mechanism for his company from containers, ships and docks, as it owns shares in a commercial dock and another for oil.
.png)
A member of the Parliamentary Finance Committee warns: Sending the government's budget tables based on the previous oil price is suicidal and risky.
Al-Karawi said, during his appearance on the program "Free Talk" on Al-Furat satellite channel this evening, that: "Building a budget with these numbers is financial suicide and puts the state in a real embarrassment regarding the payment of dues to the companies implementing the projects," adding that "the schedules have not arrived yet, and if they are sent in the same previous version, Iraq is heading towards an economic disaster."
He pointed out that "the government has failed to maximize non-oil revenues, and there are no concrete programs to achieve this yet, despite previous projections that these revenues would reach 27 trillion dinars." He explained that "the goods entering through border crossings without taxes only benefit merchants, while there are no realistic steps to enhance the state's resources."
Al-Karawi added, "Articles 11, 12, and 13 of the budget law were amended due to popular pressure to include oil exports through SOMO and the localization of salaries of employees in government banks. However, implementation remains stalled to this day, creating a legal impasse as the government continues to pay salaries without completing the localization procedures."
He continued, "We found in the tables debts exceeding 4 trillion dinars owed by the Kurdistan Regional Government as financial differences for the previous two years, reflecting a clear failure to resolve the salaries and oil issues with the region."
Al-Karawi criticized the lack of priorities in budget allocations, saying, "A large portion of the support went to the Ministry of Trade, while the Ministries of Agriculture and Water Resources received only modest support despite the serious challenges they face."
He revealed that "Iraq's water reserves have fallen to less than 10%, below the critical threshold, while there is no clear government plan to address this dangerous decline."
Al-Karawi concluded by saying, "The parliamentary finance committee is currently virtually inactive, and the management of funds is clearly flawed. This requires a restructuring of priorities and support for the domestic economy to ease the pressure on Iraqi citizens."
Oil Price Reset in Budget" Bloomberg: Salaries in Iraq Under "Pressure"
Bloomberg , the international economic network, revealed today, Tuesday, April 15, 2025, the existence of what it described as "Iraqi government efforts" to reset the price of a barrel of oil in the 2025 budget, after it lost about 13% of its total value during the current month as a result of fears of an economic recession following the trade war declared by US President Donald Trump.
The network reported, as translated by Baghdad Today, that Iraqi officials confirmed to it that the government is currently considering "resetting the price of a barrel of oil" in the remaining 2025 budget, with the aim of determining the government's ability to cover operating costs, most importantly salaries, based on the new oil prices.
She continued, "The decline in oil prices places additional pressure on countries that rely on oil for their revenues, especially Iraq, which relies almost entirely on oil revenues to cover its operating budget and finance the reconstruction of its infrastructure destroyed by years of war."
The network also noted that adjusting the price of a barrel of oil in the budget will help the Iraqi government develop a realistic picture of its ability to cover operating costs, in addition to exploring ways to reduce spending as global prices continue to decline.
Parliamentary warning: Banks dominate transfers, and corruption threatens the economy!
The Parliamentary Integrity Committee warned on Tuesday of a catastrophe for the Iraqi economy.
Committee member Youssef Al-Kalabi said, "We have warned more than once, both when we were on the Finance Committee and now on the Integrity Committee, of the grave danger threatening Iraqi monetary policy through the acquisition by some banks with foreign connections that can dominate remittances. This is what is happening today."
He added, "Some banks make $200 million, $250 million, or $300 million a year, and we have banks that have closed because there's a war against them." He noted that "the former general manager of remittances and investments at the Central Bank had numerous corruption cases and suspicions against him and was summoned to the Integrity Commission's corruption court."
He stated that "the Central Bank has no real vision or plan to address the currency issues and the dominance of a few banks, numbering between three and four, in dollar sales," warning of "the danger of these banks monopolizing currency sales, which could nullify remittances and cause a catastrophe."
A massive project to export Iraqi oil and gas... Learn about the details of the Turkish proposal
continues to increase oil and gas exportsIraqIt is a headache for the government.BaghdadAs one of OPEC's largest producers seeks to leverage its resources to revive its economy.
A breakthrough appears to be on the horizon, with a Turkish proposal to build new lines that do not include the disputed Kirkuk-Ceyhan line.
According to the Oil and Gas Pipelines Database, the proposal goes beyond boosting oil and gas exports.Iraq...as it offers Baghdad on a golden platter a solution to one aspect of the electricity problem.
The route of the new oil and gas pipelines
indicates that they will be extended from...Basra GovernorateIn Iraq, all the way to the port of Ceyhan overlooking the Mediterranean, with the aim of opening a new avenue for the flow of Iraqi resources to the market.
The proposed pipeline route begins by transporting oil and gas fromBasraPassing through the city of Haditha in the governorateAnbarWest of the country, up to the city of Slovenia in the southTürkiyeThus ,
the new lines' route avoids passing through the region.KurdistanThe reality is in northern Iraq.
There appears to be a link between the proposed route of the new pipelines and the route of the pipeline linking Basra and Haditha, which received government approval last January.
Despite the benefits of the pipeline (which has a capacity to transport 2.25 million barrels per day), there have been calls to reject it for fear of reviving the proposed pipeline that passes throughJordanHowever, the proposed lines from Basra to Türkiye take a different route.
According to the proposal's details, there is a preliminary route for transporting both oil, gas, and electricity.
*Oil Transport:
There is an internal Turkish pipeline connecting the Silopi oilfields to the port of Ceyhan, and the new proposal strengthens the connection of this pipeline
to the Iraqi oil fields in Basra. Turkish Energy Minister Alparslan Bayraktar explained that the expansion through the connection to the Iraqi oil fields in Basra will help ensure the sustainability of oil exports.BaghdadFor crude, and ensures flows reach Mediterranean markets.
He pointed out that the Basra fields are important to ensure the "Slubi-Ceyhan" pipeline transports up to 1.5 million barrels per day.
*Gas transportation:
Turkey, according to Bayraktar's proposal, seeks to establish a gas transportation system that reaches the Iraqi border, to transport 5 billion cubic meters of gas, reciprocally and reversely, between the two countries.
It plansAnkaraTo establish a gas pipeline that will transport gas supplies from Basra to Silopi, and then from Silopi to the port of Ceyhan.
Bayraktar revealed that Turkey will be a transit point and a "hub" that guarantees Iraq's supply of gas to Ankara and other countries.
Turkey benefits from the transit of Iraqi oil and gas by collecting transit fees through pipelines in its territory.
The proposed project is expected to revitalize Turkey's coffers, which have been negatively affected by the disruption of the collection of transit fees for flows through the Kirkuk-Ceyhan pipeline, which has been halted for more than two years. Ankara's losses in this regard are estimated at about one billion dollars.
Iraq currently aims to meet domestic demand for gas (for electricity generation or other purposes) by ending gas flaring by 2028, despite possessing large untapped reserves.
Electricity:
Iraq relies heavily on gas for electricity generation, and the Turkish proposal includes plans to provide the country with the necessary gas supplies. However, Baghdad has not commented on the extent to which these goals are consistent with its plans for self-sufficiency.
Turkey intends to increase electricity exports to Iraq and extend two additional transmission lines to connect the two countries, which will save Baghdad from pressure: a shortage of Iranian gas imports (which constitute the largest share of Iraqi electricity generation at 30%), and the US President’s campaignDonaldTrump is against it.
Turkey: An Energy Hub
The proposal serves Turkey's interests as it seeks to become a major energy hub in the region.
Ankara appears to be paying close attention to the new pipelines, especially since the proposal was made by Energy Minister Alparslan Bayraktar, according to statements reported by SB Global.
He added that Ankara and Baghdad have initially agreed on the pipeline proposal, and the coming months may witness the signing of a joint energy agreement between the two countries. Until then, studies and consultations continue.
Turkey has pledged to support the Iraqi project with approximately $17.9 billion, as it represents an "opportunity" for it to enhance energy cooperation with Baghdad.
The agreement was not limited to securing pipelines to transport Iraqi oil and gas, but extended to another proposal that would partially help solve the country's worsening electricity crisis, by agreeing on another pipeline to transport supplies.
Challenges of the Turkish Proposal
: Turkey's proposal to expand pipelines with Iraq aims to: (ensure energy security and diversify supply sources), especially since the transport of oil, gas, and electricity represents an expansion of the "Development Road" project adopted by Baghdad.
Eser Ozdil, a non-resident fellow at the American think tank "Atlantic Council," said that Turkey will remain dependent on imports for years, despite expectations of increased production from the field.JabbarOil production to 100,000 barrels per day and the start of production at the Sakarya gas field.
Ozdil expects the aforementioned projects to be implemented if they are reinforced with political and financial support from Turkey, Iraq, Qatar, and the UAE, in addition to...European UnionThe World Bank.
The Turkish proposal to extend Iraqi oil and gas export pipelines to markets via Ankara faces challenges, including:
1) Securing political and financial support.
2) The pipeline's route requires passing through the Kurdish city of Fishkhabur on the Iraqi-Turkish border. The infrastructure at this point has faced risks due to armed conflict, resulting in damage to a pipeline that extends there and is not yet operational.
3) The entire infrastructure, including oil and gas fields and pipelines, is subject to sabotage.
4) The ongoing dispute between Turkey and Iraq over the Kirkuk-Ceyhan pipeline has not yet been resolved (however, the Turkish Energy Minister indicated that this issue is not an obstacle to the expansion of the proposed new pipelines).
5) Objections to the "Development Road" project, as it avoids passing through the Kurdistan Region in the north of the country.
6) The development of the Grand Faw Port—expected to be completed by 2028, as one of the largest global ports—is linked to pro-Iranian groups.
Muscat to host round two of US-Iran talks
The next round of indirect negotiations with the United States will take place in Muscat, Oman, on April 19, Iran stated.
Foreign Ministry spokesperson Esmaeil Baqaei told state news agency IRNA that the decision was made after consultations between the parties. “The venue for the upcoming talks has been finalized as Muscat,” Baqaei said.
Iranian and US envoys held a preliminary round of indirect talks in the Omani capital on April 12, with Omani Foreign Minister Badr bin Hamad Al Busaidi mediating between delegations. Both sides later described the exchange as constructive and agreed to reconvene this week.
The announcement comes after conflicting reports about the location of the next session. Iranian lawmaker Ebrahim Rezaei said Deputy Foreign Minister Majid Takht-e-Ravanchi had briefed parliament suggesting the talks could move to Rome, while maintaining that Oman would continue to mediate.
Italy’s ANSA news agency earlier reported that Italian Foreign Minister Antonio Tajani had said Rome would host the second round.
The Revolutionary Guards warn Washington: Our military capabilities are a "red line."
Iran's Revolutionary Guards on Tuesday considered Iran's military capabilities a non-negotiable "red line" in the ongoing indirect talks with the United States.
"The national security, defense, and military power of the Islamic Republic of Iran are red lines that are not subject to negotiation or discussion under any circumstances," Revolutionary Guards spokesman Ali Mohammad Naeini was quoted as saying by the official IRIB news agency.
These statements come amid ongoing tensions between Tehran and Washington, which are engaged in indirect negotiations amid escalating international pressure on Iran, including threats of further sanctions or the possibility of military attacks targeting its nuclear facilities.
US Special Envoy Steve Witkoff had previously stated that any potential diplomatic agreement with Iran would hinge on two "basic conditions," without revealing their details. This further ambiguity surrounds the political landscape in what is considered one of the most complex issues in international relations.
The Washington-Tehran agreement threatens oil prices...further decline
Experts have warned of a potential decline in global oil prices if the United States and Iran reach a new nuclear agreement, amid expectations that lifting sanctions on Tehran will lead to a significant increase in oil supply in global markets.
Iran currently produces approximately 3.3 million barrels of oil per day, of which it exports approximately 1 million barrels via what is known as the "shadow fleet," a network of ships that conceal the origin of shipments through complex maritime transport operations, most of which take place in Southeast Asia.
Economist Nabil Al-Marsoumi believes that signing a new nuclear agreement will allow Iran not only to increase its exports but also to release approximately 100 million barrels of crude oil stored in old vessels known as "floating storage."
Al-Marsoumi added that Iran, despite its current lack of significant spare production capacity, is capable of increasing its production and exports within a year, especially since it is not subject to production quotas within the OPEC+ alliance.
This comes at a time when the oil market is experiencing ongoing pressure due to a supply glut and weak global demand, making any further increase in exports—especially from an influential player like Iran—a likely factor in further price declines.
The 2025 budget is at the mercy of the oil market, and Parliament is awaiting the schedules.
Every year, Iraqis await the state budget like rain during a dry season, hoping it will bring them some promise of a less harsh life, services that preserve their dignity, and job opportunities that spare them the humiliation of poverty. But this wait has become exhausting, especially when figures are delayed and details are lost amidst the corridors of politics and market fluctuations.
Today, the story is repeated with the 2025 budget, which was supposed to reach parliament after the Eid holiday, but was delayed due to the decline in oil prices, the resource on which the country remains almost entirely dependent.
The government says it's in an unenviable position, and the Finance Committee confirms that the challenges are great, the deficit is growing, and while citizens sit on the sidewalk, surrounded by rising prices and poor services, the budget remains postponed, like many of the long-awaited dreams of Iraqis.
Member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, confirmed to Baghdad Today, Monday (April 14, 2025), that “the 2025 budget tables were scheduled to reach the House of Representatives after the Eid Al-Fitr holiday, but they have been delayed until now due to the decline and instability of oil prices, which has had a significant impact on the budget and its expenditures, as well as the deficit.”
He added that "the government is working to organize budget schedules in accordance with the changes in the global oil market, and therefore it may delay sending those schedules to the House of Representatives further until they are finalized in accordance with the new changes in the economic reality." He emphasized that "the government is in an unenviable position due to the decline in oil prices, which has significantly impacted financial allocations in the budget's spending headings."
In the same context, Jawad Al-Yasari, deputy chairman of the parliamentary committee for regions and governorates, revealed that there is a parliamentary movement to host a number of government officials to discuss the repercussions of the continued decline in oil prices on the country's financial and economic situation.
Al-Yassari told Baghdad Today, "The continued collapse of oil prices will have serious and major repercussions on the financial and economic situation in Iraq during the coming period, as Iraq depends on financing its budget by more than 90% through oil sales."
He added that "MPs from various political blocs took action during today's session and submitted requests to the parliament's presidency to host a number of government officials from the monetary authority to learn about the measures and steps being taken to secure the necessary funds in light of the collapse in oil prices," stressing that "Iraq needs clear, advance plans to confront any potential financial and economic challenges."
It's worth noting that the Iraqi government had set the current budget price at $70 per barrel, meaning that any significant decline in prices could cause a wide revenue deficit and present the government with difficult economic choices.
Despite repeated calls to diversify sources of income and revitalize non-oil productive sectors, such as agriculture, industry, and tourism, successive governments have failed to take tangible steps in this direction. This has led to a worsening financial deficit with each oil crisis, directly impacting service projects, salaries, and social programs.
Delays in budget approval have been a recurring phenomenon in Iraq in recent years, often attributed to political disputes or economic changes, disrupting the functioning of state institutions and delaying the implementation of development plans.
US Firm Proposes Major Healthcare Investment in Baghdad
American Global Medical Services (AGMS) is set to expand its footprint in Iraq, following a meeting between CEO Dr. Aizen J. Marrogi and Prime Minister Mohammed S. Al-Sudani on Monday.
The company has proposed establishing a comprehensive medical city in Baghdad, which would include a 200-bed cancer hospital, a pharmaceutical manufacturing facility, a nursing college, and a training academy. The project, fully funded by AGMS, is expected to create more than 1,500 local jobs and will deploy over 200 medical and administrative professionals.
Prime Minister Al-Sudani directed that 60 dunams of land in Al-Rasheed Camp be officially allocated for the project, reaffirming the government's commitment to advancing U.S.-Iraq cooperation under the Strategic Framework Agreement-particularly in the healthcare sector.
The Prime Minister of the Kurdistan Regional Government receives an American delegation.
Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani received a US delegation headed by Deputy Assistant Secretary of State Victoria Taylor on Tuesday, April 15.
The meeting discussed ways to strengthen bilateral relations, the general situation in Iraq and the region, and efforts to form the new KRG cabinet.
The two sides emphasized the need to expedite the formation of the new KRG government before the Iraqi parliamentary elections are held this year.
Both sides agreed on the importance of resuming the Kurdistan Region’s oil exports, especially since delaying this process would incur huge losses to the federal budget and revenues, a matter that cannot be postponed further.
In another aspect of the discussions, the importance of guaranteeing the financial rights and entitlements of the Kurdistan Region and respecting its federal and constitutional entity was emphasized.
Al-Sudani's advisor: Annual returns from investing reserves are no less than $2 billion.
The Prime Minister's advisor for financial affairs, Mazhar Mohammed Salih, confirmed on Tuesday that the "annual returns" from investing foreign reserves are no less than two billion dollars, according to his estimates.
"These investments are often short-term and directed toward US, European, or British treasury bonds, with the aim of achieving appropriate returns," Saleh told Shafaq News Agency.
He added, "These investments are characterized by low risk and generate appropriate returns, and the invested assets can be quickly converted into cash without incurring losses."
Saleh pointed out that "profits generated from reserves are divided into two types: the first is realized, represented by direct interest, and the second is unrealized, resulting from diversifying the investment portfolio, in addition to realizing potential profits from exchange rate differences between currencies and gold."
The Central Bank of Iraq previously revealed a decline in foreign reserves for 2024, reaching 130.81 trillion dinars, a 10.18% decrease compared to the same period in 2023, when these reserves reached 145.64 trillion dinars.
Al-Sudani reiterates Iraq's support for dialogue between Washington and Tehran.
The Oil Minister and his Iranian counterpart sign a cooperation agreement to exchange expertise.
Prime Minister Mohammed Shia al-Sudani reiterated Iraq's support for the ongoing dialogue between the United States and Iran, stressing the region's need for cooperation to achieve common security .
A statement received by Al-Zaman yesterday said that “Al-Sudani met with the Special Representative of the Secretary-General of the United Nations in Iraq, Mohammed Al-Hassan, and they reviewed the path of cooperation with the United Nations and the procedures for ending the work of the international mission operating in Iraq.” Al-Sudani appreciated “the significant and important role played by the UN mission in assisting Iraq over the past two decades,” stressing “the continuation of cooperation between the Iraqi government and the specialized agencies of the United Nations, especially in the areas of administrative reform and climate change.” He pointed to “the region’s need for cooperation and coordination between its various countries to achieve common security,” reiterating “Iraq’s support for the ongoing dialogue between the United States of America and Iran .”
For his part, Al-Hassan affirmed the international organization's readiness to support Iraq's vision regarding the challenges facing the region. Meanwhile, Iraqi Oil Minister Hayan Abdul-Ghani Al-Sawad signed memoranda of understanding with his Iranian counterpart, Mohsen Paknejad, to enhance joint cooperation. A statement received by Al-Zaman yesterday said that Abdul-Ghani received his Iranian counterpart in his office, and they discussed prospects for joint cooperation between the two countries .
He pointed out that "the two sides held a meeting during which they discussed the mechanisms of cooperation between the two countries in various sectors, where memoranda of understanding and agreements were signed in the field of exchanging experiences and joint cooperation to serve the interests of both countries." Abdul Ghani stressed that "Iraq has promising projects in gas investment and is working to achieve self-sufficiency in petroleum derivatives." For his part, Paknejad expressed his "thanks for the warm reception and visit to Iraq, as well as the depth of cultural relations between the two countries," stressing "the importance of continuing relations between the two countries in all fields." In addition, the Minister of Electricity, Ziyad Ali Fadhil, revealed the qualification of 16 new specialized companies by the Central Bank of Iraq to install solar energy systems in homes .
The Minister said in a statement yesterday that (16 new specialized companies have been qualified by the Central Bank of Iraq to install solar energy systems in homes, bringing the total number of qualified companies to 24, after 8 companies had been qualified previously), and he pointed out that (this step comes as a continuation of government efforts aimed at diversifying energy sources and relieving pressure on the national grid), stressing that (expanding the base of qualified companies will contribute to accelerating the implementation of projects and meeting the growing demand from citizens to benefit from the Central Bank’s initiative for soft loans), and he went on to say that (this initiative provides citizens with the opportunity to install solar energy systems in their homes through soft loans from the Central Bank of Iraq, which helps in the transition to clean energy that improves the environment and reduces pollution rates ).
Swiss Ambassador: I found a tremendous amount of goodwill and stability in Iraq
Swiss Ambassador to Iraq Daniel Hohn praised the Iraqi government's efforts to stabilize the country on Tuesday, noting that he had received tremendous goodwill from his Iraqi friends and partners.
“Babylon, the cradle of human civilization, is the perfect place to highlight literature and music against the backdrop of this historic site. In the 12th edition of the festival, for me, this is my first time participating, but it will certainly not be my last,” said Swiss Ambassador to Iraq Daniel Hohn in a speech during the Babylon Festival. “I received a very warm welcome when I arrived seven or eight months ago, after Switzerland reopened its embassy in Baghdad, and since then I have witnessed a tremendous amount of goodwill from my Iraqi friends and partners, from the Iraqi authorities and institutions, and above all from ordinary Iraqi citizens who have expressed their happiness and satisfaction with Switzerland’s return.”
“Our decision to return shows that we believe in this country and in the stability of Iraq. I would like to take this opportunity to commend the Sudanese Prime Minister and his government for the tremendous efforts made in this regard. I see every day how focused the Prime Minister is on stability at home and in the region, and he has proven successful in this,” he added, noting that “by reopening our embassy, we Swiss wish to highlight our support for the efforts of the Sudanese Prime Minister and to demonstrate our belief in the economic capabilities of this country and the potential for cooperation between Swiss and Iraqi companies. We believe in the possibility of cooperation in the cultural field and in the possibility of partnership and friendship between individuals and between our two peoples.”
"Since arriving in Baghdad, I have discovered that the ties between Iraqi and Swiss citizens are much deeper than I had imagined," Hohn explained. "I have noticed that many Iraqis living in Switzerland have regained their confidence in their country of origin. They are returning here not only to see their families, but also to invest in businesses and strengthen cultural ties."
A KDP leader: The Kurdistan Region will convince oil companies to resume exports.
Karim told Furat News, "Among the important topics discussed by Prime Minister Mohammed Shia al-Sudani during his visit to the region was the extent of the losses incurred by Iraq due to the halt in Kurdistan's oil exports over the past two years, which amounted to $23 billion."
He added, "The region will work diligently to persuade oil companies to resume exports, as part of the recent understandings aimed at ending the stalemate on this issue."
Parliament expresses surprise at the government's delay in submitting the 2025 budget schedules.
The Finance Committee of the Iraqi Parliament expressed surprise on Tuesday at the government's delay in submitting the 2025 budget schedules to the parliament, despite previous promises.
Committee member Saad al-Nubi told Shafaq News Agency, "The Parliamentary Finance Committee recently hosted both Minister of Planning Mohammed Tamim and Minister of Finance Taif Sami to discuss the 2025 general budget law schedules. The two ministers informed the committee that the schedules would be sent to the Council of Ministers."
He added, "However, we still note the government's delay in sending the budget tables to Parliament for discussion and voting," considering that "there is a clear challenge on the part of the government in not sending the tables to Parliament without knowing the reasons."
Al-Nubi continued, "The budget was supposed to reach parliament before the end of last month, but we don't know the reasons for this delay." He noted that "the committee pressured the Minister of Planning and the Minister of Finance, asking them to explain the reason for the delay in submission, but has not received a response yet."
It is noteworthy that the Iraqi Parliament voted in June 2023 on the draft general budget law for the fiscal years (2023, 2024, 2025).
Trump calls Sultan of Oman about talks with Iran
US President Donald Trump held a phone call on Tuesday with Sultan Haitham bin Tariq Al Said of Oman, during which they discussed ways to support the nuclear talks between Iran and the United States, according to the Oman News Agency.
The agency reported that the two leaders discussed "Omani efforts in the ongoing negotiations between the United States and Iran, and ways to support these negotiations to achieve the desired results."
Oman hosted the first round of Iranian-American talks in its capital, Muscat, with the negotiating parties describing the atmosphere as positive.
Trump's top team meets on Iran talks strategy
On Tuesday, US President Donald Trump convened a high-level national security meeting at the White House to discuss the next phase of indirect nuclear negotiations with Iran, sources told Axios.
Held in the White House Situation Room, the meeting brought together Vice President JD Vance, Secretary of State Marco Rubio, Secretary of Defense Pete Hegseth, National Security Adviser Mike Waltz, CIA Director John Ratcliffe, and Trump's Middle East envoy Steve Witkoff, Axios reported, adding that the discussion focused on shaping the US position ahead of the second round of talks scheduled for Saturday in Oman.
The talks follow a phone call between Trump and Omani Sultan Haitham bin Tariq, whose government is mediating between Washington and Tehran. Both leaders agreed to support the negotiations and pursue “desired outcomes.”
Oman hosted the first round of indirect US-Iran talks in its capital, Muscat, with negotiating parties describing the atmosphere as positive.
The second round of negotiations is expected to build on the momentum from last Saturday’s indirect talks, with growing scrutiny over the scope of Iran’s nuclear activities and Washington’s willingness to make concessions.
Trump has sent mixed signals, expressing hope for a diplomatic resolution while repeatedly threatening military action if talks fail. “If we have to do something very harsh, we will do it,” he said on Monday during remarks in the Oval Office, warning that Iran must move quickly or risk severe consequences.
Witkoff described the first round of Oman talks as "positive" in a Monday night interview on Fox News, stating that the US is demanding Iran halt uranium enrichment above 20%, including the near-weapons-grade level of 60%, while noting that some civilian-level enrichment to 3.67% could be negotiable under strict verification.
Earlier today, Iran’s Supreme Leader Ali Khamenei downplayed the significance of ongoing indirect nuclear negotiations with the United States in Oman.
Talabani: We seek to build a free, diverse economy.
Deputy Prime Minister of the Kurdistan Region, Qubad Talabani, received German Ambassador to Baghdad, Christiane Hohmann, on Tuesday. The two sides discussed ways to strengthen relations between the region and Germany.
According to a statement from Talabani's office, "The meeting discussed the economic situation and development efforts in the region. Talabani explained that the regional government seeks to build a free, multi-source economy that prioritizes the development of the agricultural sector and the food and agricultural industries."
Talabani added that "attentiveness to this sector will provide significant job opportunities for citizens and ensure food security in the region and Iraq," praising Germany's extensive assistance over the past period, particularly in the field of sending advisors and specialists to advise the regional government.
Parliamentary warning: Banks dominate transfers, and corruption threatens the economy!
The Parliamentary Integrity Committee warned on Tuesday of a catastrophe for the Iraqi economy.
Committee member Youssef Al-Kalabi said, "We have warned more than once, both when we were on the Finance Committee and now on the Integrity Committee, of the grave danger threatening Iraqi monetary policy through the acquisition by some banks with foreign connections that can dominate remittances. This is what is happening today."
He added, "Some banks make $200 million, $250 million, or $300 million a year, and we have banks that have closed because there's a war against them." He noted that "the former general manager of remittances and investments at the Central Bank had numerous corruption cases and suspicions against him and was summoned to the Integrity Commission's corruption court."
He stated that "the Central Bank has no real vision or plan to address the currency issues and the dominance of a few banks, numbering between three and four, in dollar sales," warning of "the danger of these banks monopolizing currency sales, which could nullify remittances and cause a catastrophe."
Oil Price Reset in Budget" Bloomberg: Salaries in Iraq Under "Pressure"
Bloomberg , the international economic network, revealed today, Tuesday, April 15, 2025, the existence of what it described as "Iraqi government efforts" to reset the price of a barrel of oil in the 2025 budget, after it lost about 13% of its total value during the current month as a result of fears of an economic recession following the trade war declared by US President Donald Trump.
The network reported, as translated by Baghdad Today, that Iraqi officials confirmed to it that the government is currently considering "resetting the price of a barrel of oil" in the remaining 2025 budget, with the aim of determining the government's ability to cover operating costs, most importantly salaries, based on the new oil prices.
She continued, "The decline in oil prices places additional pressure on countries that rely on oil for their revenues, especially Iraq, which relies almost entirely on oil revenues to cover its operating budget and finance the reconstruction of its infrastructure destroyed by years of war."
The network also noted that adjusting the price of a barrel of oil in the budget will help the Iraqi government develop a realistic picture of its ability to cover operating costs, in addition to exploring ways to reduce spending as global prices continue to decline.
No comments:
Post a Comment