A loss threatening the state treasury .. An expert explains the implications of Iraq’s decision to reduce oil production
A loss threatening the state treasury .. An expert explains the implications of Iraq’s decision to reduce oil production
08/07/2020 15:33
Baghdad today – Baghdad
The Iraqi Ministry of Oil said that it will implement additional reductions in Iraq’s oil production by about 400 thousand barrels per day in August to compensate for surplus production in the past period under the OPEC + agreement to reduce production, which is what economists expected that Iraq’s financial revenues for this month will decrease by about 14 percent .
A statement issued by the Iraqi Ministry of Oil and the Iraqi Oil Marketing Company (SOMO) said that the August oil production cuts will be more and higher than agreed for this month.
” If Iraq actually cut 400,000 barrels of its oil production in the current month of August as announced by the Ministry of Oil (which may be excluded), its oil exports will decrease from about 2.750 million barrels in July to 2.350 thousand barrels in August, then its oil revenues will decrease by 14 % from 3.487 billion dollars last July to 3.136 billion dollars in August if Iraq sold at 41 dollars / barrel, which is almost the same level as last July’s prices, knowing that Iraq It needs oil revenues of $ 4 billion a month to cover salaries only . ”
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, began a record supply cut in May to support oil prices hit by the Corona virus crisis. And Iraq cuts its production by 1.06 million barrels per day under the agreement.
Iraq says it is committed to the OPEC + agreement and will strengthen compliance with it. Iraq had told OPEC + that it would compensate for overproduction in May and June through deeper cuts in subsequent months.
The average of Iraq’s total oil exports in July was 2.763 million barrels per day.
Revenue last July
The Iraqi Oil Ministry announced, on Saturday, that the financial revenues of oil exports for the month of July witnessed an increase compared to the previous months, despite the decline in exports.
According to preliminary statistics issued by the Iraqi Oil Marketing Company “SOMO”, “the amount of exports of crude oil amounted to (85) million (663) thousand and (290) barrels (eighty-five million six hundred and sixty-three thousand and two hundred and ninety barrels), with revenues of more than From (3) billion and (487) million and (139) thousand dollars (three billion four hundred and eighty seven million one hundred and thirty nine thousand dollars). ”
Iraqi exports in the previous month of June reached 2.816 million barrels per day, with financial revenues of $ 2.861 billion.
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