Iraq’s economy may pose a threat to OPEC
Iraq’s economy was shaken by low oil prices and production cuts. For this reason, it may not fulfill the production cuts promised to OPEC + in order to improve its financial situation.
Iraq is one of the world’s largest oil exporters, but is in an economically difficult position, with energy demand falling after the pandemic.
Iraq’s situation is so bad that it cannot even pay teachers and civil servants their salaries. This raises concerns that the uprising that took place last year and that overthrew the government could happen again.
The Iraqi people demand that the government produce more oil with the citizen in mind first, but if a major producer such as Iraq does not comply with the production reduction agreement, other countries may not comply with the production cuts, which could disrupt the order.
An agreement was reached between Iraq and other OPEC + members last April. According to this agreement, OPEC countries and Russia would reduce the daily oil production amount by around 1 million barrels.
The reason for these cuts was the thought that rising prices could compensate for the loss in exports.
In the period from April to this time, oil prices have more than doubled, reaching 40 dollars per barrel.
Iraq needs more than this price because it cannot afford its financial burden. The government currently has a monthly income of $ 3 million. This money is almost half of last year.