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By Youssef Ali.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

President Donald Trump’s decision to pull out of the nuclear deal and sign the executive order to reimpose sanctions on Iran has had a significant impact on the global oil markets.

This move poses a severe threat to the economies of major oil exporting countries including Iraq, the second largest oil exporter in OPEC after Saudi Arabia and the third in the world after Russia and Saudi Arabia by 4.4 million barrel per day. Many analysts are reflecting on the effects that this conflict has on the economy of Iraq, which heavily relies on oil.

The sanctions mainly target the Iranian energy sector, which supplies Iran with foreign exchange and at the same time represents about 40% of revenues of its budget. The goal of the sanctions is to prevent Iranian oil exports by imposing sanctions on its customers.

Eliminating Iranian oil supplies will cause unrest in the oil markets around the world because it will lead to price surges, hence substantial economic losses on importing countries, which are already fearing a potential recession. That is why the U.S. tried to convince some of OPEC’s members to increase their supplies contrary to the recent deal amongst OPEC and non-OPEC countries to decrease production, and that in order to compensate Iranian supplies and prevent the disruption of the oil market to prevent damage to the global economy.

This move led to massive disputes between the major suppliers and pushed Iran to threat blocking oil exports from the Middle East altogether if it was to be prevented from exporting its own oil to the international market. If Iran follows through with its threat, it would mean massive losses for the Gulf countries, including Iraq whose economy is primarily depended on oil exports.

That said, completely stopping Iranian oil exports would be practically unlikely for the following reasons:

The nature of oil markets which is volatile and is based on trust. If the OPEC members in the Gulf Region, especially Saudi Arabia and UAE decided to replace the sanctioned Iranian oil supplies, the possibility alone that Iran would follow through its threat of closing the Strait of Hormuz would diminish the trust in that market. The supplies which pass through the strait would be considered as unstable, importers would start looking for alternate sources. This would destroy energy markets in the Middle East, meaning massive losses to the economies of all parties involved, including neutral states such as Iraq.

On a global basis, the mentioned encounter will damage the international economy that is fearing a potential recession, because this encounter, if it happens will cause a massive increase in global oil prices, leading to a domino effect that would create a hike in the prices of many goods and services.

This is why it is expected that while the sanctions will be implemented, all parties involved will allow for under-the-table arrangements in order to avoid such mutual destruction by allowing Iran to open an limited channel to export its oil, as it has happened in the past. Prior to signing the nuclear deal, UAE oil brokerage companies and banks played such a role before they were shut down after the recent pull out of the nuclear deal by the U.S. Allowing for such back-channels would mean that the sanctions will have their impact on the Iranian economy by disrupting the traditional oil export routs and limiting its revenue, yet allowing for a backdoor deal that will help the international community avoiding a conflict that could have grave impact on the global economy.

There is a role for Iraq to play in this crisis. The current policy of Iraq in regards to this conflict, in which it is trying to mediate between the parties involved is a wise policy. It is in the interest of nobody to escalate the situation in the Gulf region. On the other hand, Iraq could, given the circumstances,  gain enormous benefits by performing the same role that UAE brokerage companies and banks were playing, which would be a win-win for everyone involved.

In other words, Iraq can empower its private sector to establish companies and banks that facilitate the financial transactions related to the Iranian oil export, which would add important revenues to the economy of Iraq and increase the financial movement in the country; at the same time it would ensure the interests of Iran and decrease the likelihood of an encounter in the Gulf, which would serve the Gulf Arabs well.

Iraq must exploit this opportunity, especially since the Europeans countries along with Russia and China have already expressed their willingness to play this role. This opportunity could also be a significant incentive for Iraq to improve its ailing banking system to be able to implement such operation.

However, this is not possible without  negotiating with the U.S. on this issue in order to avoid being subject of the sanctions. The U.S. has in the past exempted Iraq from the sanctions for dealing with Iran, given its special circumstances. The U.S. also has expressed its readiness this time to allow some exceptions. This could be Iraq’s chance to negotiate an arrangement that serves everyone well, at least for the short-term.

On the long term however, Iraq has to find alternate routes to export its oil in order to avoid the increasingly unstable oil routes of the Arabian Gulf. Viable solutions could be the Iraq-Jordan pipeline that would start in Basra and end in Aqaba. Iraq needs to accelerate building this pipeline. Another option is the rehabilitation of the Iraq-Syria pipeline that begins from Kirkuk and ends in Banias, which, of course, would only be an option if the security in Syria improves.

Iraq is either the core, or constantly caught in the middle of many crisis that are shaking the Gulf region. These reoccurring crisis pose huge obstacles in front of rebuilding and investment. If Iraq wants to survive them, it needs to play a constructive role and aim for stability and profit for all parties involved.

By John Lee.

The spokesman for the Ministry of Electricity, Dr. Musab Sari al-Mudaris [Mussab Serri al-Mudaris] (pictured) has denied reports that he had told Bloomberg about an agreement to buy electricity from Saudi Arabia.

He said the statement from the news agency is incorrect.

Bloomberg had cited Mudaris as saying that Saudi Arabia agreed to build a 3,000-megawatt solar power plant in Saudi Arabia and sell the electricity to Iraq at $21 per megawatt-hour, a quarter of what it paid Iran for the imports.

Iran recently stopped supplying electricity to Iraq due "the accumulation of debts owed by Baghdad".

(Source: Ministry of Electricity, Bloomberg)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Mustafa Habib.

Iraqi Internet Shuts Down, Fake News Blossoms During Information Blackout

When it came to disinformation, shutting down the Internet to prevent protests in Iraq may have backfired. Iraqis get most of their information from social media and there was none, so false reports circulated wildly.

On June 14, the Iraqi government shut down the Internet in an effort to try and prevent the spread of anti-government protests. The demonstrations, which called for better state services, power and water, had spread from the southern city of Basra to nine other provinces, including Baghdad. And clearly the government wanted to prevent them from going any further.

For the past few years, these types of protests have broken out every summer. In stifling heat rising to 50 degrees Celsius, the lack of power to refrigerate foods or keep houses cool and the fact that water coming out of the taps is salty, is enough to drive Iraqis to protest. But these demonstrations spread further than previous years.

And one imagines that the Iraqi government was trying to prevent the spread of information about the protests, in order to contain them. They are able to block the Internet thanks to the fact that most of infrastructure used for relaying the Internet is government-owned.

However the Internet blockage seemed to only frustrate Iraqis further. Locals here rely heavily on social media to get their news; they tend not to trust local media, believing it to be partisan or funded by interested parties who push their own agenda. What friends and relatives post on Facebook has become a major and important source of information – and when the Internet is down they obviously cannot access this.

So locals found themselves watching TV to get more information about the protests or resorting to VPN – virtual private networks – to access the online world. Iraqis have become accustomed to using this kind of software when the government shuts down, or throttles the Internet here, but as digital privacy experts point out, these too can be  dangerous, especially with regard to privacy.

Clearly Iraqis right around the country were interested to know more about the protests. But pictures and videos were hard to come by, given the Internet shutdown. This led dozens of Facebook pages, specializing in Iraqi news and current affairs, to write up stories about the protests – but as they did, they also used older pictures and videos and many ended up publishing unsubstantiated rumours.

Iraqis who sympathized with the demonstrators didn’t just publish news reports on their pages, they also uploaded pictures and videos to Facebook – some of these were real and some were not. News organisations, like NIQASH, received these kinds of items via messages from people who appeared to be private citizens; however, due to the Internet shutdown, it was difficult to verify the content that was being sent and some of it was certainly not from the current demonstrations.

In fact, as Internet-rights activist and head of the Ansam Network, Haidar Hamzouz, says, the Internet blockade may well have had the opposite of the government’s intended effect. “Shutting down the Internet is a violation of the freedom of expression,” Hamzouz told NIQASH. “And the decision to do this was not the right one – it actually contributed to the spread of false news and it also became very difficult to inform anyone that  certain items were false news.”

It seems that in Iraq, as elsewhere in the world, false reports and emotion-generating half-truths spread far faster than the truth.

Even though the government owns the public broadcaster, Iraqi Media Network, and they have huge resources, they still have not been able to stop the spread of these false reports and rumours, Hamzouz says. “We need institutions that are capable of relaying the facts and combatting fake news, rather than those who just shut down the Internet,” he argues. “Combatting fake news and untrue reports requires a change in the communal culture, one that values verification and checks sources. Unfortunately this doesn’t yet exist in Iraq,” he notes.

One of the more dangerous pieces of false news involved reports that the security forces, who were clashing with the demonstrators in the south, were actually from elsewhere, and more specifically from Anbar and Mosul. The message was that Sunni Muslim soldiers – who mainly come from central and northern Iraq - were abusing Shiite Muslim protestors, who mainly live in southern Iraq. It was clearly a report aimed at fuelling sectarian conflict.

“It is so unfortunate that this news incited hatred against us,” says Ali al-Rubaie, a police captain based in Rustafa, Baghdad. “The members of the security forces who were deployed to the protests were actually residents from the same cities. Each province has its own police and counter-terrorism forces. It would be impossible to do that job with troops from outside of the provinces in which the protests occurred,” he argues.

Additionally when the protests first started, news that the demonstrators were clashing with Iraqi security forces spread fast. But given the internet blockade, it was difficult to find pictures from incidents. One picture that was shared many times shows an Iraqi soldier pointing his gun at an unarmed civilian lying on the ground. However the picture was actually taken during a military training exercise in 2014, organized for a military training graduation ceremony in Karbala.

Another dangerous piece of news had Talib Shaghati, the head of Iraq’s special forces troops, commenting on the clashes between the demonstrators and the security forces. “This is not our battle and we will not stain our hands with the blood of our sons and brothers for the sake of some corrupt officials,” Shaghati was alleged to have said in a  statement that was widely circulated on social media.

The same report said that Shaghati  had been asked to send his troops to the protests but he had refused, and that he had asked the government to listen to the demonstrators’ demands before it was too late. Thousands of Iraqis believed this report and some even said that there should be a military coup because it was clear that the protests had no impact on the government, and the military were on the protestors’ side.

The US was not coming to the rescue either: One report said that US president Donald Trump had said his government was keeping a close eye on the protests in Iraq. This was followed by video footage of two military divisions landing at Baghdad airport. None of this was true: The video was an old one.

Saudi Arabia was not coming to the rescue either. As the protest movement gained momentum, its critics were divided. Some said Iran was behind the protests because the neighbouring nation was going to stop supplying power to Iraq. Others said Saudi Arabia was at fault and was pushing people to demonstrate in order to cause chaos in Iraq.

One of the obviously false reports was started by a page on Facebook called Saudi News. It said that Saudi Arabia’s ruling monarch had ordered water lines and electricity transmission lines to be built urgently for the southern parts of Iraq. The report spread quickly throughout Iraqi social media despite its fanciful nature.

KRG Prime Minister Nechirvan Barzani received a delegation from the Kingdom of Saudi Arabia including President of the Chambers of Commerce of Saudi Arabia Dr. Sami bin Abdullah Al-Obaidi, Saudi Ambassador to Iraq Abdulaziz al-Shammari, Saudi Consul General to the Kurdistan Region Mansour Faisal al-Otaibi and a number of officials and members of Saudi Chambers of Commerce.

Opportunities for investment in the Kurdistan Region and strengthening of economic and trade relations in various sectors were discussed. In particular, they highlighted areas of mutual interest in industry, agriculture and tourism.

The delegation expressed desire to encourage investment in the Kurdistan Region due particularly to the security and stability which prevail in the Region and its appropriate conditions for investment.

Starting direct flights between the Kurdistan Region and Saudi Arabia and the opening of a Saudi bank in the Kurdistan Region and Iraq were discussed as initial steps. They also agreed to hold a conference in the Kurdistan Region or in Saudi Arabia with the participation of investors and businessmen from Saudi Arabia, Iraq, and the Kurdistan Region. Establishing a joint committee to monitor progress on these initiatives was agreed.

Prime Minister Barzani expressed the KRG’s readiness to provide assistance and facilities for Saudi companies to invest in the Kurdistan Region and to promote and develop economic and trade relations between Iraq and the Kurdistan Region with Saudi Arabia.

Kurdistan Region Presidency Chief of Staff Dr. Fuad Hussein and a number of KRG officials also attended the meeting.

(Source: KRG)

The coalition and its partnered forces in Iraq and Syria continue to make progress in the effort to defeat the Islamic State of Iraq and Syria, the coalition’s senior French representative has said.

Brig. Gen. Frederic Parisot of the French air force, the director of civil-military operations for Combined Joint Task Force Operation Inherent Resolve, provided an operational update briefing to Pentagon reporters today via videoconference from Baghdad.

Coalition strikes in April and June killed six high-value terrorist leaders responsible for planning terror operations overseas, Parisot announced. He credited the Syrian Democratic Forces, the Iraqi security forces and the coalition for the progress in defeating the terrorists.

“Thanks to the operations conducted by the SDF, ISF and the coalition, we are stopping [ISIS] from being able to conduct terror across the world and degrading the ability to plan and finance such operations,” he said.

In a news release, the coalition said the removal of the six terrorists has prevented ISIS’ external attack planning, facilitation and operations targeting Saudi Arabia, Sweden and the United States.

The release says those killed were a Syrian-based ISIS member planning attacks in Saudi Arabia; a Belgian foreign fighter who came to Syria to plan attacks against the United States and its interests; and four people linked to a Swedish attack plot.

Focus on ISIS Defeat

Parisot detailed other progress in the fight, including the Iraqi security forces working with Kurdish peshmerga fighters in joint operations to clear an area in the mountains near Kirkuk, Iraq.

Additionally, along Iraq’s western border, the Iraqi forces continue to prevent terrorists from pouring into Iraq while the coalition continues to provide intelligence, overwatch and fire support to partner force on the ground, he said.

Parisot pointed out that Operation Roundup is in its 84th day of activating the offensive to defeat ISIS remnants in the Middle Euphrates River Valley. He noted the recent liberation of Dashishah in Syria, which was among the last terrorist strongholds in the area.

“Thanks to the combined SDF ground offensive, strikes by coalition and Iraqi forces and border security operation by the ISF, Dashishah has been freed after four years of tyrannical [ISIS] rule,” he said.

Fight to ‘Finally Rid the World’ of ISIS

France is steadfast in its support to the coalition, Parisot said, highlighting the strikes French forces have conducted operations as well as providing the training and other support French forces provide toward the defeat-ISIS effort.

“My country knows firsthand the horrific acts that [ISIS] is willing and capable of committing, and that's why we will remain committed to this fight,” he said.

He said the 1,100 French forces in Iraq, Kuwait, Jordan, Qatar and the United Arab Emirates are working side by side with coalition nations at the forefront of efforts to defeat ISIS.

“France is honored to stand among the 72 nations and five international organizations that comprise the most successful international coalition ever formed,” he said. “We remain committed to the fight to finally rid the world of [ISIS] once and for all”

(Source: US Dept of Defense)

By John Lee.

The Trade Bank of Iraq (TBI) has announced that it will open a branch in Saudi Arabia.

Faisal Al Haimus, Chairman of TBI said:

“This important addition to our bank accomplishments shall strengthen trading and banking relationships between the two countries."

(Source: TBI)

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Police and medical sources say at least 11 people have now died in protests in southern Iraq against the poor state of public services.

The unrest began in Basra last week and has spread to several other large cities.

One of the main reasons for the anger is the frequent power blackouts that are severely worsening living conditions.

Some in Iraq are hoping that Iran can supply them with electricity via Iran's national grid, prompting Saudi Arabia to offer aid.

The government in Baghdad is racing to find a way to meet some of the protesters' demands for economic and energy reforms and bring an end to the protests before they turn into a large, nationwide movement.

Al Jazeera's Imran Khan reports from Baghdad:

New pre-arrival clearance protocols and reduced terminal handling charges for containers in transit, mean that Jordan’s deep-water Aqaba Container Terminal (ACT), located on the Red Sea, is now a realistic alternative maritime gateway for Iraq-bound cargo, APM Terminals said in its press release.

Containers imported into Iraq will no longer have to be trans-loaded onto new trucks as they cross the Jordanian/Iraqi border.

“The Aqaba Container Terminal has been working hard over the years to develop a competitive gateway to Iraq," says ACT Managing Director Steven Yoogalingam. “This will enhance the already strong Iraqi port system and gives the business communities of both countries a fantastic transportation system to better support economic development in the region."

Ideally located, the ACT is 550km - or 36 hours by road - from the Iraqi border town of Traibil and 48 hours from Baghdad. This development comes as the volume of Iraqi imports experience rapid growth - 86% last year alone.

The ACT is a joint venture between ADC, the Jordanian Government's development arm for the Aqaba Special Economic Zone, and APM Terminals, which manages the facility. It is the second–busiest container facility on the Red Sea after Jeddah (Saudi Arabia).

A terminal expansion project completed in 2013 added 460 meters to the existing quay to create a total length of 1 km and increased the annual container throughput capacity to 1.3 million TEUs.

Iraqi imports grew by 86% in 2017 to $36.5 billion - the leading sources being China, Turkey, Iran, South Korea and the United States, with food, medicine and manufactured goods the primary products.

(Source: APM Terminals)

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

It's been three weeks since the parliamentary election in Iraq and many Iraqis voted for a nationalist party opposed to foreign interference.

But both Riyadh and Washington want an Iraq that is sympathetic to their interests and pro-Iran militias were instrumental in defeating ISIL.

Worries in Iraq are increasing that tension between Iran and the US, along with its Saudi ally, could undermine stability in the country.

Al Jazeera's Osama Bin Javaid from Baghdad, Iraq:

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.