A debate over whether Iraq should seek an exemption from the OPEC+ oil supply cuts has resurfaced, Reuters reported, citing Iraqi and OPEC sources. According to the report, there are differing views between the Iraqi prime minister’s office and the oil ministry. The prime minister’s office insists on complying with the pact, while the oil ministry seeks an exemption.
Some Iraqi politicians have criticised the deal signed by the previous administration in 2016. They argued that Iraq’s oil industry had been ravaged by military conflicts, sanctions, and the pandemic at a time when other OPEC producers enjoy their expanding market shares. In June, Iraq asked OPEC to consider a member’s economic situation to determine the future production quota, a source within the cartel said.
Oil revenues fund 97% of Iraq’s state budget. The Finance Minister Ali Allawi on Wednesday told parliament that the country’s economic reform would need up to five years. Meanwhile, state debt stood at 80-90% of national products, with foreign debt amounting $133 billion. The World Bank said Iraq’s GDP would contract by 9.7% in 2020, after recording a 4.4% growth in 2019.
