By Ahmed Mousa Jiyad. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Serious and Impacting Discrepancies in Estimating Oil Export Prices and Revenues
A comparison of available data on oil export prices and revenues for the first four months of this year reveals significant discrepancies in estimates. This analysis suggests a high probability that the potential fiscal deficit in the 2024 budget could exceed projections, particularly if the Ministry of Finance (MoF) data is accurate.
According to MoF data, the actual deficit in oil export revenues through April, compared to projections, amounts to approximately 6.017 trillion Dinars. To compensate for this shortfall, the average export price would need to exceed $90 per barrel, with oil exports maintaining a minimum of 3.5 million barrels per day (mbd) from May through year-end. The feasibility of this scenario is questionable.
Conversely, estimates based on data from two alternative sources indicate a minimal deficit in actual oil export revenues during the same four-month period. This stark contrast in estimates raises important questions: Why does such a wide discrepancy exist? What are the potential consequences? Which estimate is likely to be more accurate?
It is noteworthy that despite the Ministry of Oil's (MoO) lack of transparency in publishing data on oil export prices and total export revenues, it is possible to estimate these figures using official government data and other sources.
This analysis aims to conduct a comparative study of oil export price estimates and total export revenues for the first four months of this year, examining the impact of these estimates on the volume of deficit or surplus in oil export revenues. The comparison encompasses three estimates based on data from different sources:
- Estimates based on MoF data
- Estimates based on data from the Iraq Oil Report (IOR)
- Estimates based on directly related Marker Crude Prices (MCP)
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Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here.
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