The increase in world crude oil prices this year will add $8 billion [9.6 trillion Iraqi dinars] to the Iraqi budget, the Secretary-General of Iraq’s Council of Ministers said.

Ali al-Allaq (pictured) told al-Sabah Newspaper in Baghdad on Tuesday that  the increase would result in additional allocations to for the implementation of projects.

He added that the Iraqi government “expects the increase to be more than the above figure, which would contribute to the implementation of additional service projects in the whole country.”

The budget is based on an average oil price of $76.50 per barrel, and 2.2 million barrels per day in crude exports.

(Source: Aswat al-Iraq)

With political and social upheaval, first in Tunisia and now in Egypt, the big question on many minds at the moment is to what extent the unrest will spread to other countries in the Arab world.

But despite the undoubted poverty in Iraq, it is rarely mentioned as possible candidate for a popular uprising, and the reason is that Iraq has a functioning democratic system, painfully slow and imperfect though it may be. The people of Iraq have had the chance to express their opinions at the ballot box.

The turmoil is clearly having an impact on Iraq in another way: the price of oil. Hitting $102 on Wednesday, crude oil is up 7% in the past week, and is well above the $73 per barrel on which the country’s 2011 budget is based.

A spokesman for Iraq’s Ministry of Oil confirmed that the Egyptian situation would not restrict Iraq’s output and export of oil, and if that continues to be the case, Iraq may stand to benefit significantly from these developments.

Upper Quartile and AAIB work closely with businesses in the energy and infrastructure sectors. To see how they can assist your business in Iraq, please contact Gavin Jones or Adrian Shaw.

The oil and finance ministries agreed to set the price of oil barrel at $73, to be endorsed in the 2011 state budget, oil ministry spokesman Assem Jihad told Aswat al-Iraq news agency at the weekend.

“The agreement comes in light of an export rate of 2.3 million barrels per day (bpd), including the oil exports from northern Iraq’s Kurdistan Region, estimated at 100,000 bpd,” Jihad told the agency.

Jihad pointed out that his ministry had talks with the World Bank in Amman recently in the presence of Iraq’s oil and finance ministers as well as experts from the Central Bank of Iraq.

“The World Bank expressed satisfaction over Iraq’s achievements in the field of developing oil and gas fields, which should help improve economic conditions to cope with the global economy and overcome the current state budget deficit by 2013,” he added.

Iraq had set $62 for a barrel of oil in the 2010 budget.

The initial budget for Iraq in 2011 is approximated at $86.4 billion, an increase of $14 billion from the current year’s budget.

(Sources: Aswat al-Iraq, AKnews)

Iraq’s State Oil Marketing Organisation (SOMO) has raised the official selling prices for its Basra Light and Kirkuk crude grades for October loading to the U.S. and Asia, but dropped prices to Europe.

In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:

• For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);
• Shipments to Europe are priced relative the North Sea Spot BFOE; and
• Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.

November prices are as follows:

Iraq’s State Oil Marketing Organisation (SOMO) has raised the official selling prices for its Basra Light and Kirkuk crude grades for October loading to the U.S. and Europe.

In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:

* For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);

* Shipments to Europe are priced relative the North Sea Spot BFOE; and

* Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.

October prices are as follows:

• Kirkuk crude to Europe increased the most, rising by $1.95 a barrel, and will sell at a premium of 15 cents a barrel to the North Sea (Dated Brent) benchmark;
• Basra Light to Europe will cost $1.50 a barrel more in October than in September and will sell at a narrower discount of $1.45 a barrel to Dated Brent;
• U.S. buyers will see a fifth consecutive price increase for the grade, with the discount to the ASCI narrowing to $1.15, an increase of 15 cents;
• Kirkuk oil for U.S. buyers will climb 10 cents a barrel to a 35 cents premium above the ASCI benchmark;
• The discount for Basra Light to Asia narrowed by 20 cents to $1.35 a barrel below the Dubai-Oman benchmark.

(Sources: Bloomberg, Reuters)

Iraq’s State Oil Marketing Organisation (SOMO) has cut the official selling price for September shipments of its Basra Light crude to Asia, reducing the cost to its lowest level in eighteen months, while raising its price to the US.

In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:

• For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);
• Shipments to Europe are priced relative the North Sea Spot BFOE; and
• Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.

Basra Light Crude is now priced at:

• For US, a discount of $1.30 relative to the ASCI for September (up from a discount of $1.40 in August);
• For Europe, a discount of $2.95 relative to North Sea for September (down from a discount of $1.95 in August);
• For Asia, a discount of $1.55 relative to Dubai-Oman (down from a discount of $1.10 in August).

While Kirkuk crude will sell for:

• For US, a premium of $0.25 relative to the ASCI for September (same as in August);
• For Europe, a discount of $1.80 relative to North Sea for September (down from a discount of $0.95 in August).

Iraq exported 627,000 barrels of crude a day to the US in 2008, representing about 6.4 per cent of all US oil imports, according to the Energy Information Administration.

Saudi Arabia this month cut prices for September liftings of all crude grades to Asia and lowered prices for light crudes to the US.

(Source: Wall Street Journal, Gulf News, Arab Times)

Related articles:

• Iraq Oil Revenues 95% of State Income
• Iraq Oil and Gas Report