Mazhar Muhammad Saleh, the Prime Minister’s financial advisor, described the impact of rising oil prices in global markets on the federal budget today, Thursday, while noting a “important matter” in the value of pricing.
In an interview with the Maalouma Agency, Saleh stated that “the oil markets indicate a tangible rise in the prices of the cycle of oil assets, especially with Brent exceeding the $90 per barrel barrier, which has a positive impact on reducing the hypothetical deficit gap in the federal budget, which is estimated to be approximately 64 trillion dinars on average.” In fiscal years 2023, 2024, and 2025, there will be a deficit.”
“The deficit gap was adopted as a preventive financial buffer to confront fluctuations in oil prices and demand surprises in energy markets,” he explained, adding that “what matters is that the average price of exported oil during the fiscal year exceeds the default price approved by the budget for a barrel of Iraqi oil, which is $70.”
According to the Sudanese financial counselor, “any sales that exceed the default price above will undoubtedly lead to reducing the gap in the default deficit, with a clear inverse relationship.”
Crude oil prices rose sharply in global markets on Thursday, as prices regained their upward momentum despite negative oil inventory data in the world’s largest consumer of crude oil, the United States.
Spot Brent crude prices increased by approximately 0.94% to $93.01 per barrel, while West Texas Intermediate crude contracts increased by about 0.91% to $89.65 per barrel.
According to analysts, the highest budget figures in Iraq’s history offer significant fiscal dangers to the country, particularly in terms of income and reliance on the oil resource.