Iraq, the second-largest oil producer in OPEC, is exploring new revenue streams due to the unpredictable nature of international crude oil prices. The country’s reliance on oil has made its budget income uncertain.
On Monday, the finance committee in Iraq’s Parliament announced plans to increase non-oil revenues. This move aims to create a more stable and predictable income for the government. Currently, over 90% of Iraqâs government revenue is generated from oil, leaving the nation vulnerable to fluctuations in oil prices.
Atwan al-Atwani, chairman of the finance committee, emphasized the need to diversify revenue sources. âIraq relies heavily on oil to fund its general budget. Therefore, we must identify and enhance non-oil revenues,â he told Shafaq News Agency.
Al-Atwani expressed concern about the instability of oil prices, stating, âAs Finance Committee members, we are not reassured by this instability. We are committed to improving non-oil revenue collection to support the Iraqi budget.â
In the short term, Iraq’s oil revenues may decline as the country reduces its crude oil exports to comply with OPEC+ production cuts. Iraq has been exceeding its OPEC+ quota for months and has committed to compensating for this excess.
In August, Iraq’s crude oil exports fell to approximately 3.3 million barrels per day (bpd), down from 3.48 million bpd in July and 3.41 million bpd in June. This reduction is part of Iraq’s efforts to adhere to OPEC+ supply curbs.
Despite being OPECâs second-largest producer, Iraq often struggles to meet production control agreements due to its significant dependence on oil revenues. To address this issue, the Iraqi government recently revamped its oil and gas investment framework, shifting from technical service contracts to profit-sharing agreements to attract more investment in its energy sector.
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