Iraq, which relies on oil revenues for more than 90 percent of its revenues, was set to face “vast economic pressures,” said Fatih Birol, head of the International Energy Agency (IEA).
“In the current crisis, Iraq’s oil revenues will struggle to break $2.5 billion per month,” said Birol, appealing to Iraqi officials to find “urgent solutions.”
Brent oil prices tanked this week to $26 per barrel, the lowest since 2003, following a hit to global oil demand from the novel Coronavirus outbreak and a price war between major producers Saudi Arabia and Russia.
Between plummeting oil prices, political deadlock and reduced global appetite for a bail-out, Iraq is on the cusp of financial calamity that could force austerity measures and renew anti-government protests.
Iraq is the second-biggest crude producer in the OPEC oil cartel, and typically exports around 3.5 million barrels per day. Its draft 2020 budget was based on a projected price of $56 per barrel.
With prices slashed, Iraq’s net income would drop 65 percent in 2020 compared to last year, incurring a monthly deficit of $4 billion just to pay salaries and keep the government running.
