• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days Does Toyota Know Something That We Don’t?
  • 5 days World could get rid of Putin and Russia but nobody is bold enough
  • 23 hours America should go after China but it should be done in a wise way.
  • 7 days China is using Chinese Names of Cities on their Border with Russia.
  • 8 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 8 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 8 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 7 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 8 days Putin and Xi Bet on the Global South
  • 8 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 9 days United States LNG Exports Reach Third Place
  • 9 days Biden's $2 trillion Plan for Insfrastructure and Jobs

$70 Oil Isn’t Enough To Stabilize Iraq Right Now: Moody’s

Iraq’s economy will strengthen this year as a result of higher oil prices but this will not be enough to stabilize it over the long term, according to Moody’s.

The ratings agency affirmed Iraq’s stable outlook along with its long-term non-investment grade rating citing the country’s continued over-reliance on oil revenues.

“The rating affirmation reflects credit challenges posed by Iraq's exceptionally high economic and fiscal reliance on oil, and very weak institutions and governance that … will continue to limit policy effectiveness, constrain the government's capacity to respond to external and domestic shocks and weigh on the already low competitiveness of Iraq's economy,” Moody’s said as quoted by The National.

Iraq is OPEC’s second-largest oil producer but years of war with Islamic State have left it even more vulnerable to oil price swings than its fellow OPEC members. To date, the country relies on oil for as much as 90 percent of its budget spending.

It was because of this excessive dependence on oil revenues that Iraq struggled to meet its production quota under the OPEC+ production control agreements from the past couple of years. Iraq’s non-compliance proved so blatant that at one point Saudi Arabia threatened its neighbour to open its own taps to punish it for pumping too much.

Lately, however, Iraq has been careful with its quota. The latest figures from state-owned SOMO confirm it as the company reported a decline in oil output from May to June and also a slight decline in exports.

Meanwhile, in a fresh blow to the already troubled state, Oil Minister Ihsan Abdul Jabbar said last week Russia’s Lukoil had formally notified the government it planned to exit the West Qurna-2 field and that BP, too, was thinking about leaving Iraq. The minister cited the unfavourable investment climate as reason for the companies’ plans.

By Charles Kennedy for Oilprice.com


More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News