The Sudanese advisor diagnoses an “important matter” with oil prices.. How do they affect the budget deficit?
The Sudanese advisor diagnoses an “important matter” with oil prices.. How do they affect the budget deficit?
9-14-2023
Information/private..
Today, Thursday, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explained the impact of the rise in oil prices in global markets on the federal budget, while identifying an “important matter” in the value of prices.
Saleh said, in an interview with the Maalouma Agency, that “the oil markets indicate a tangible rise in the prices of the cycle of oil assets, especially with Brent exceeding the $90 per barrel barrier, which has a positive impact on reducing the hypothetical deficit gap in the federal budget, which is estimated at approximately 64 trillion dinars on average.” Deficit in fiscal years 2023, 2024 and 2025.”
He added, “The deficit gap was adopted as a preventive financial buffer to confront fluctuations in oil prices and demand surprises in energy markets,” noting that “what matters is that the average prices of exported oil during the fiscal year exceed the default price approved by the budget for a barrel of Iraqi oil, which is $70.”
The Sudanese financial advisor explained, “Any sales that exceed the default price above will undoubtedly lead to reducing the gap in the default deficit, with a clear inverse relationship.”
During Thursday’s trading, crude oil prices recorded a strong rise in global markets, as prices reached their upward momentum, ignoring negative oil inventory data in the largest consumer of crude oil in the world – the United States.
Spot Brent crude contracts rose significantly by about 0.94% and reached $93.01 per barrel, in addition to West Texas Intermediate crude contracts rising by 0.91% to reach about $89.65 per barrel.
The largest budget numbers in Iraq’s history pose major economic risks to Iraq, especially with regard to revenues and dependence on the oil resource, according to economists.
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