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Among the options being considered by Iraqi lawmakers to reduce dependence on the Strait of Hormuz, is the reopening an oil pipeline to Saudi Arabia that's been closed since the Gulf War in the 1990s.

Currently, most of Iraq's oil exports are shipped by tanker from Basra through the Strait of Hormuz, but Iran has threatened the strait in response to economic pressure from the West.

The Radio Free Europe/Radio Liberty's bureau in Iraq reports that a committee in the Iraqi Parliament has called for talks to re-open an oil pipeline to Saudi Arabia that was shut down after Iraq invaded Kuwait in 1990.

The 626 km pipeline, built in 1986 by Mitsubishi of Japan and OTF of Hungary, has capacity to export nearly 1.5 million barrels per day to the Saudi port of Yanbu on the Red Sea.

(Sources: RFE/RL, AKnews, UPI)

This article was written by Abeer Mohammad, and was originally published by the Institute for War and Peace Reporting, iwpr.net. It is reproduced by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi officials are hoping that hosting the first Arab League summit after the wave of revolutions that swept through the Middle East and North Africa will increase their country’s standing in the region.

“It is very important for Iraq to host this particular summit at this particular time,” Ali al-Mosawi, a media advisor to the Iraqi government, said. He noted that this meeting would see “some officials meet others for the first time” – a reference to new leaders who have emerged from revolutions in Arab states over the last year.

Mosawi said the three-day forum in Baghdad, starting March 29, would discuss the continuing unrest in Syria and Bahrain, and Palestinian issues. Syrian president Bashar al-Assad has not been invited.

The agenda also includes restructuring the Arab League itself, after criticism of the way it has acted over the last year.

“Its hierarchy will be reviewed for the first time since it was established more than 50 years ago,” Mosawi said.

For Iraq, the meeting – especially coming at such crucial moment for the region – presents an opportunity to bolster its relations with the rest of the Arab world.

Iraq is expected to challenge the Saudi contender for the post of Secretary General of Organisation of Petroleum Exporting Countries (OPEC), according to a report from Middle East Oil & Gas.

An Iraqi official told the Gulf Times: “Iraq is working to nominate Thamer Ghadban for this position”. Ghadban is currently the top energy adviser to Iraqi Prime Minister Nouri al-Maliki, and was Iraq’s oil minister from 2004-05.

OPEC may ask its current secretary general, Abdullah al-Badri, to remain in the post for an unprecedented third term should the group fail to reach consensus. If he were willing to stay on, OPEC would need to make an exception to its statute that says the secretary general can only serve two three-year terms. Delegates say this is possible.

"The issue will be discussed during the coming OPEC meeting [in June] and the option of Badri staying on is still on the table," a anonymouse delegate from a Gulf OPEC country said.

"If the Saudi delegate doesn't get support from all the member-countries then Badri might remain as secretary general and that would be the best solution for the time being," a second delegate said.

(Source: MEOG)

Iraq could be one of the richest countries in the world. Yet over three quarters of Iraqis do not have bank accounts. So where do they keep that wealth, asks this article from NIQASH, and can the Iraqi banking system be dragged into the 21st century?

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

The banking sector in Iraq reflects the economic mess that the country is in. Basic modern banking practices – like electronic funds transfers for payroll or other banking needs - are almost non-existent and credit facilities are hard to come by. Automatic teller machines remain a novelty while mortgages and loans are a rarity.

Iraq has only a few banks with the ability to transfer funds electronically and the number of branches able to undertake this sits at around 240. Transferring funds directly to Iraqi banks remains a patchy process and it is more often done through other banks in the region, such as more reliable sister bank in Jordan or the United Arab Emirates.

Latest research estimates that around 80 percent of Iraqis do not have a bank account or even access to one. The public's trust in the Iraqi banking sector remains low. Which is why most banks in Iraq simply act as a glorified safety deposit box.

Meanwhile Iraq is on track to become one of the wealthiest countries in the world, with the fourth largest oil reserves in the world and the potential to be one of the globe's leading oil exporters, eventually matching, or even surpassing, Saudi Arabia, currently one of the largest oil exporters in the world. But despite incoming revenue and the potential for growth, economic progress remains slow - and this is partly due to dysfunctional banking sector. There is talk of sector reform and new electronic banking systems - yet this vital sector is still underdeveloped.

Iraq is demonstrating its unique position in the Middle East again, flexing its new diplomatic muscle to resolve an oil exporting crisis between the West, OPEC and Iran, according to this article from NIQASH. But who’s behind these efforts: Iran, the US or Iraq itself?

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

As the current head of OPEC, Iraq is testing its diplomatic mettle further, by mediating between the oil exporters in the Gulf countries, the EU and neighbouring Iran.

The crisis that Iraq is dealing with involves Iran and Saudi Arabia and oil exports from throughout the region. Recently, the countries of the European Union agreed to impose sanctions on Iran’s oil exports, banning the signing of any long term oil export contracts come July 1, 2012. The move was intended to put pressure on Iraq because if its plans to build up nuclear capacities.

And the July deadline was supposed to give the EU members nations time to find alternative supplies. However Iran then decided to cease oil exports to the UK and France earlier, as way of increasing pressure on the Europeans, pre-empting their ban – although apparently the gesture was largely symbolic as both nations had already stopped buying Iranian oil.

The other thing that Iran has done is threaten to close the Hormuz Strait, one of the most important shipping channels in the world; around one fifth of all crude oil passes through the narrow shipping channel, which lies between the Gulf of Oman and the Persian Gulf.

Saudi Arabia has named an ambassador to Baghdad for the first time since Saddam Hussein invaded Kuwait in 1990, Iraqi Foreign Minister Hoshiyar Zebari (pictured) told Reuters on Tuesday.

"This is a very positive development," he added.

A Saudi Foreign Ministry spokesman said: "We nominated our ambassador in Jordan [Fahd al-Zaid] as ambassador for Iraq as well, but he will not be residing in Iraq."

Martin Kobler, the special representative of the United Nations secretary general for Iraq, welcomed the move as an “important step” toward normalizing ties between the two countries, according to the New York Times.

Saudi commentators said the move appeared to be motivated mostly the country's desire to strengthen its relationship with Iraq before the Arab League summit in Baghdad at the end of March.

A successful summit in Baghdad would help restore Iraq's place in the Arab world and perhaps contribute to allaying Gulf states' concerns about Iran's influence in post-war Iraq.

(Sources: Reuters, New York Times)

The Basra Investment Commission has approved a $100 million waste plant to be built by Dow Chemical's Kuwait branch, according to AKnews.

The company, which already has plants in Kuwait, Saudi Arabia and Qatar, will enter Basra and invest in water purification projects and will consider providing environmental solutions, professional consultation and technical services.

Waste and industrial water will be treated and recycled, converting polluted river water and high saline ground water into safe water for drinking and irrigation.

Tawfiq al-Manei, company adviser and director of the International Bureau of Consultancy and Economic Studies, said: "We chose Basra because of its multiple benefits, most importantly the geographical location for the State of Kuwait.

"The rate of waste in Basra reaches to 2,000 tons a year which makes us in dire need for such projects to recycle and treat waste and improve the environmental situation in Basra."

(Source: AKnews)

This article was written by Abeer Mohammed and Anas al-Bdeer, and was originally published by the Institute for War and Peace Reporting, iwpr.net. It is reproduced by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Reported comments by an Iranian Revolutionary Guards commander boasting of his country’s influence abroad have sparked controversy in Iraq. Analysts say the seriousness with which the incident was taken reflects the huge sensitivities surrounding sovereignty issues after the United States military withdrawal.

Tehran quickly moved to insist that the comments attributed to the commander of the Revolutionary Guards’ Quds Force, Qassem Sulaimani, in which he apparently suggested that both Iraq and southern Lebanon were under Iranian control, were badly misquoted.

“These statements are false. They are groundless and meant to achieve crooked aims,” a statement which the Iranian embassy in Baghdad sent IWPR on January 21 said.

The Iranian ambassador to Lebanon, Ghazanfar Roknabadi, said the actual comments Sulaimani made were mistranslated.

“In his original remarks, Brigadier-General Qassem Sulaimani said many countries in the region are inspired by the ideas of the Islamic revolution in Iran,” he told the As-Safir newspaper. “Unfortunately, his words have been deliberately twisted.”

Saudi Telecom (STC), the kingdom’s largest telephone company, has reportedly abandoned plans to bid for Iraq’s fourth mobile-phone licence after delays in awarding the contract.

Ghassan Hasbani, the company’s chief executive officer for international operations, told MEED that they will only be interested in the licence if they receive “concrete” information from the government.

(Sources: MEED, Bloomberg)

Iraq would be drastically affected should Iran block the Hormuz Strait. Most of the oil Iraq produces is exported via the Strait. The scenario is seeing Iraq, distinct because of its good relations with both the US and Iran, practice its new diplomacy again, according to this article from NIQASH.

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

Iran’s threats to block seagoing traffic in the Hormuz Strait, one of the most important waterways in the world, have caused strong reactions in Iran’s neighbour, Iraq, as well. Iran has made the threats in response to possible European and US economic sanctions. And despite the current internal political turmoil in Iraq, it has also led to another significant attempt by Iraq at international diplomacy.

Around one fifth of all crude oil passes through the narrow shipping channel, which lies between the Gulf of Oman and the Persian Gulf. Iraq is currently heading OPEC (the Organization of the Petroleum Exporting Countries) and as such, Iraq’s Minister of Oil Abdul-Kareem Luaibi announced that he would be travelling to Tehran this week in order to extract assurances from Iran that they wouldn’t block the Strait.

In terms of diplomacy, this is another notable attempt at mediation by Iraq. The most recent involved Iraq’s intervention between the Arab League and Syria, which continues this week with Iraq declaring further intentions to continue to assist in trying to defuse the Syrian crisis.

In terms of the Hormuz Strait issue, Iraq is really the only nation that can do this kind of thing, as it has good relationships with the US and Iran. Iraq also sits in the middle between the nations like Saudi Arabia who are friendly towards the US and nations that consider themselves resistant to US influence, such as Iran. It’s hard to say whether this diplomatic role will continue in the future – some believe that Iran’s influence will grow and lead Iraq into that country’s corner whereas others say that US influence will remain strong.