(MENAFN- Iraq Business News)
By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News .
Iraq Oil Exports 2023 - Budget vs. Realities
Iraq's Budget for 2023, part of an extended federal budget covering three years of 2023 to 2025, became effective on 26 June, while the fiscal year starts, constitutionally, on 1st January; this is a systemic failure to start with, particularly for a budget with 32.4% fiscal deficit!
Prior to 26 June, many dramatic events took place, particularly the earthquake and ICC rulings on the arbitration case against Turkey, with serious ramifications on realising budget aspirations. But they were not properly accommodated for in budget law.
The yearly balance sheet shows actual oil exports, oil price and oil export revenues diverged from those envisaged in the state budget. Though volume of oil exports were less than what was budgeted, realised oil export revenues showed surplus due to higher oil price. Iraq was unable to compensate for the closure of oil export through Turkey and failed to reap much of high oil price environment, though the country has installed oil production capacity good enough to meet compliance with OPEC+ commitment and to cover domestic needs, specifically for the refining sector. Limitation of the country's southern export facilities in north Arabian Gulf stand behind the failure. Lessons should be learned when drafting 2024 federal budget, which should be easy, and serious consideration is imperative in preparation for Iraq-Turkey oil pipeline agreement renewal, since the agreement is approaching its end and to avoid costly déjà vu.
This article focuses on oil issues and intends to compare budget assumptions with market reality pertaining to the mentioned above three topics, i.e., oil export, oil price and oil revenues. The article begins with providing related data and indicators identified from federal state budget and their implications. Then comparative assessment of budgeted vs reality regarding the three topics are covered using SOMO' and other formal data, with and without KRG oil, and the article ends with concluding remarks.
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Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES) , London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here .
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