Walkingstick: The next 18 months will be painful for oil-dependent countries
Issue 11341 Sunday, April 26, 2020 corresponding to 3 Ramadan 1441
Fitch: The Middle East is in danger of eroding its reserves.
The credit rating agency Fitch said that the economies of the Middle East face the risk of eroding their cash reserves, which were built during more than two decades of increasing improvement in crude oil prices, due to the increase in global demand. But cheap oil prices on the global market are dragging the oil-producing countries of the Middle East into collapse, whose economies are largely dependent on crude oil production and exports
The drop in crude oil prices seriously threatens most oil producing countries in the Middle East and North Africa, which need oil prices between $ 60 to $ 85 and possibly more, to balance their budgets.
World Ranking Agency data indicate that Saudi Arabia, the heavyweight in OPEC, and the largest exporter of crude oil in the world, needs a price of $ 91 a barrel to achieve a break-even point in profits and losses, while Oman needs $ 82 a barrel, and the UAE to $ 65 a barrel , Qatar to $ 55 a barrel, Iraq to $ 60 a barrel and Iran to $ 195 a barrel.
The oil-producing countries of the MENA region are also expected to see a decline in economic growth rates in 2020, due to lower oil prices, according to the International Finance Institute.
It is estimated that the economic growth rate of Saudi Arabia will reach 0.7% this year, down from the previous expectations of 2%, as well as expectations of economic growth in Kuwait from 2.8% to 0.8%, while the UAE is waiting for growth of 0.6%, after it was 1.9 %. If average oil prices reach $ 40 a barrel this year, 9 oil-exporting countries in the MENA region may see their total hydrocarbon profits drop a total of $ 192 billion, according to the Institute of International Finance estimates. “The surplus is increasing dramatically as refiners remain in recession, we have a drop in demand by about 38 million barrels per day,” says Mark Rosano, energy analyst at the US-based Premier Vision marketing investigation.
He explains that «the UAE and Qatar are protected a little more by the sovereign wealth fund, and LNG plays a big role for Qatar, which has been of great benefit to the country in the past few years». He notes that Kuwait and the UAE are “somewhat protected” at the present time, and the economic analyst expects that the next 18 months will be “painful”, especially for those who rely heavily on oil revenues.
“The recession started in the last quarter of 2019, and demand for refined products began to decline in May last year. The situation has worsened with the progress of the year. ” For his part, Ali Al Saffar, director of the Middle East and North Africa program at the International Energy Agency, says that some countries will be better equipped to deal with the period of low oil prices than others.
“For relatively large producers with modest population sizes, such as Kuwait, the Emirates, and Qatar, substantial financial savings will provide some protection from the financial pressures caused by lower oil prices,” he says.
The expert believes that countries will need to overcome the most difficult short-term crisis in any case, by exploiting the reserves and managing the deficit caused by the accumulation of debt. “But in the long term, there is a need to review the economic structure, including by stimulating a greater role for the private sector in a variety of sectors to reduce the total dependence on oil and gas revenues,” he added.
2Cents: Hey Newshounds,Any news from the ISX today??? I cannot pull up their site…… Did they open and trade?? Did they open at 442ish or 442,000ish??? I can not get the site to come up
Oil4cash: I have been checking as well. Sure would be nice to know. My best guess is no but anything is possible I guess.
MilitiaMan: The ISX site is down and my understanding it has been down for a significant amount of time today on and off and even before they started/if they started trading. The data is accurate, as I write this from the CBI statistics site. 11:03 04/26/2020..~MM
Samson: Member of Parliamentary Finance: There will be changes in the presidential salaries and grades
10:23 – 26/04/2020
A member of the Parliamentary Finance Committee, Thamer Diban, suggested, on Sunday, the occurrence of simple variables that include presidential salaries and special grades, indicating that oil revenues do not cover all ministerial expenditures.
Theban said in a statement to / Information /, that “Iraq relies heavily on oil revenues to cover the salaries of employees, retirees, social welfare and ministries expenses and that the amounts of oil revenues do not cover all these expenses.” He added that “there are multiple scenarios by the government and the House of Representatives, the closest of which is adopted for implementation, provided that it does not significantly affect salaries, as well as pressure government expenditures.”
Theban pointed out that “the salaries will be fully insured and it is possible that there will be simple changes and certainly the changes will include presidencies, the House of Representatives and special grades.” LINK
Samson: Economist: Withholding the salaries of employees will enter the country in a new crisis, the first of which is the renewal of demonstrations
08:50 – 26/04/2020
Between the economist, Wissam Al-Tamimi, on Sunday, that the government resorted to deducting part of the employees’ salaries to cover the budget deficit due to the low oil prices is not a positive step, pointing out that resorting to the deduction option may lead the country to a new crisis by the exit of employees in demonstrations against the government.
Al-Tamimi said in a statement to “Information”, that “the state’s resort to saving in employees salaries and deducting part of it due to the global financial crisis, is not a correct choice.” He added that “the government can resort to some job grades or the salaries of the security services that burden the budget, as a percentage of them can be deducted, especially those who receive salaries of more than two million dinars per month.” And that “deducting the salaries of employees will enter the country in a new crisis, as it will leave a total chaos, especially if the employees come out with millions of demonstrations that are added to the previous demonstrations rejecting government measures.”
He explained that “many options are presented to the government to compensate for oil losses, as it is possible to resort to selling plots of land to citizens and investing in agricultural lands and imposing symbolic fees on visitors to the holy areas, and there is gas that can be invested properly, exported and benefit from its returns.” LINK
Samson: Al-Rafidain announces the activation of the Master Card for departments and receipt of its monthly salary electronically
10:59 – 04/26/2020
Al-Rafidain Bank announced, on Sunday, the activation of Master Cards for a number of state departments and receiving the salaries of its employees for the month of April for the first time through the electronic card.
The media office of the bank said in a statement received (the information), a copy of it, that “the account managers of a number of departments addressed the general management of the bank in order to activate the cards of their employees and pay their salaries electronically, and the bank took the necessary action as soon as possible.”
The bank called the directors of other departments ’accounts to“ follow the example of these departments and take steps to do so until salaries are granted electronically in order to avoid dealing in paper money and relying on electronic trading.” LINK
Samson: A government official in Diyala announced the lifting of 10 files of integrity to investigate suspicions of “corruption”
20:57 – 25/04/2020
On Saturday, a government official in Diyala announced the lifting of 10 files of integrity to investigate suspicions of financial and administrative corruption.
Baqouba District Judge Abdullah Al-Hayali said in an interview with “Al-Maalouma”, “The Baqouba District Commissioner raised 10 files of integrity and the local Diyala government to demand investigation in projects related to various sectors, including electricity and roads, for the existence of suspicions of financial and administrative corruption in addition to technical violations.”
Al-Hayali added, “All the files that were filed have not yet received any official answer by the competent authorities,” noting that “the files were uploaded due to many complaints by the citizens and a field briefing, stressing that the ball is in resolving the files that lie with the integrity and the Diyala government.”
Diyala, during the past years, raised tens of financial and administrative corruption files for projects costing tens of billions, some of them resolved, and employees were convicted and others are still under investigation. LINK
Samson: Member of Parliament of the region: Oil corruption is “very big” and current and previous governments are involved
20:18 – 25/04/2020
Member of Kurdistan Parliament, Sirwan Baban, confirmed on Saturday that the oil file in the region is full of corruption and financial and administrative waste frighteningly over the past years and until now.
Baban said to “Information”, “The Kurdistan Parliament has monitored a number of financial violations and corruption in the oil file, as the street has become clear aware that the risk enables lack of transparency in contracts and the export of oil, and there are also violations of the dues of oil companies, as well as violations Between the center and the region in the oil issue.”
He added that “the parliament of the region issued the reform law and after that a law not to exit oil derivatives illegally, but these laws were not applied because of the lack of integrity and transparency in the previous and current governments in the oil file,” as he put it.
He stressed that “the Kurdistan Parliament, as a monitoring body that monitors financial and oil violations, submitted all files to the judiciary and the competent authorities, but it did not produce anything because of the fake democratic process in the region, as the parliament and the government share the ruling parties and because they are involved in these files, they cannot apply the law to themselves.”
Pointing out that “corruption has reached very advanced stages and we will reveal to the whole world the corruption of oil in the region and how to sell and smuggle it,” he said. LINK
Samson: Legal: Al-Kazemi’s failure to gain confidence obligates Saleh to dissolve Parliament
13:45 – 04/26/2020
Legal expert Ali Al-Tamimi confirmed, on Sunday, that the failure of Prime Minister-designate Mustafa Al-Kazimi to gain parliamentary confidence compels the President of the Republic, Barham Salih, to assume the presidency of the government and then dissolve the House of Representatives.
Al-Tamimi said in a statement to “Information” that “Article 76 of the Constitution allowed the President of the Republic to assign the candidate of the largest bloc to head the government the first time, and then assign another person in the event of the government’s resignation or dismissal, and in the third case all the paragraphs of the mandate article are exhausted.”
He added, “The failure to assign Mustafa Al-Kazimi compels the President of the Republic to assume the presidency of the government himself, because the position is vacant according to Article 81 of the Constitution.”
Al-Tamimi indicated that “Saleh’s assumption of the prime minister will give him the powers to call for the dissolution of the House of Representatives, which is binding in the event of disagreement with a candidate charged with lost time.” LINK