Iraq puts oil deal at risk

A reduction in oil production in Iraq could lead to an economic crisis in the country that would provoke hunger riots. This is stated in a Bloomberg article, transmits Lenta.ru.

Iraq is not able to reduce oil production, accounting for about 90% of the country’s revenues. This, in turn, jeopardizes the OPEC + deal. Earlier, Iraq agreed to cut production by almost 25% in May and June, but actually reduced production by only 10%. For this, the country has been criticized more than once by Saudi Arabia and Russia.

Esan Khoman, head of the MUFG Bank’s Middle East Studies Department, notes that Iraqis have long shirked their responsibilities at OPEC and will continue to do so “if they are not subject to external monitoring and some punishment for non-compliance.”

Failure is due to the plight of the Iraqi economy: a wave of protests against corruption and a low standard of living swept through the country at the beginning of the year, then the coronavirus pandemic and a drop in oil prices began.

Most businesses in Iraq were closed, and the government borrowed about $ 2.5 billion from local banks to subsidize salaries.

The World Bank predicts that Iraq’s GDP will fall by 10% this year. The IMF estimates Iraq’s budget deficit in 2020 at 22% of GDP. This is higher than anywhere else in the Middle East and North Africa.

As reported by Rambler, in March oil fell sharply as a result of the failure of the OPEC + agreement to reduce production. In April, OPEC + member states and some other states agreed to reduce production by 9.7 million barrels per day in May-June and by 7.7 million barrels per day since July.

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source: rambler