Iraq crude sales slump in May, but revenues inch up

A worker walks at Rumaila oil field in Basra, Iraq. (Reuters/File)
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Updated 02 June 2020

Iraq crude sales slump in May, but revenues inch up

  • In May, Iraq sold 99.5 million barrels of crude oil at an average price of $21, earning $2.09 billion for the month

BAGHDAD: Iraq sold fewer than 100 million barrels of crude in May, its Oil Ministry announced Monday, but recovering prices saw it rake in more revenues than the previous month.

The OPEC cartel’s second-biggest crude producer has been left reeling by the recent worldwide crash in oil prices.

In May, Iraq sold 99.5 million barrels of crude oil at an average price of $21, earning $2.09 billion for the month.

In April, it had sold more barrels — 103.1 million — but the record-low average price of $13.80 per barrel earned it just $1.4 billion.

Experts had warned that even if prices recovered, buyers had been stocking up on inexpensive oil in recent months and would not need to buy as much crude as summer began. OPEC agreed in April to introduce production cuts in May and June to try to revive prices, and Iraq will have to cut around 1 million barrels a day for both months.

Low revenues have been catastrophic for Iraq, which relies on oil sales to fund more than 90 percent of its budget.

Each month, it needs about $4.5 billion to pay salaries, pensions, welfare handouts and other government expenses.

The government is the country’s biggest employer, with at least 4 million people on its payroll and another 4 million who receive pensions or social benefits.

As part of its efforts to slash expenses, the cabinet announced this week that it was exploring cuts to the gross incomes of senior-grade public employees.

It had already decided to borrow internally to cover salaries for the month of April, senior officials told AFP. 

They said the government was considering taking on more internal and external debt, printing currency, drawing down foreign reserves and requesting budget support from the International Monetary Fund and the World Bank.

Iraq had already asked the international oil companies which produce its oil to cut down on their expenses, which are reimbursed quarterly by the Iraqi government.


Kuwaiti lessor Alafco reaches agreement with Boeing over 737 MAX dispute

Updated 27 min 29 sec ago

Kuwaiti lessor Alafco reaches agreement with Boeing over 737 MAX dispute

  • Kuwaiti lessor will now buy 20 aircraft from Boeing, instead of 40, with new delivery date

DUBAI: Kuwaiti aircraft leasing company Alafco will buy fewer aircraft from Boeing after reaching an agreement to end its legal claim over a canceled 737 MAX order, it said on Tuesday.
Alafco was suing the US planemaker for $336 million over accusations it wrongly refused to return advance payments on a canceled order for 40 of its troubled 737 MAX planes.
The Kuwaiti lessor will now buy 20 aircraft from Boeing, instead of 40, with new delivery dates, it said in a bourse filing.
Additional details of the agreement could not be disclosed due to confidentiality clauses, it said.
Alafco said it was “looking forward to a long-lasting and mutually beneficial relationship with Boeing.”
Alafco and Boeing did not immediately respond to emailed requests for comment.
Boeing suspended deliveries of its narrow-body 737 MAX jet in March last year, when the Federal Aviation Administration grounded the aircraft after the deaths of 346 people in crashes of two 737 MAX planes operated by Lion Air and Ethiopian Airlines.
The crisis over the grounding of the once top-selling 737 MAX has cost the US planemaker more than $19 billion, slashed production and hobbled its supply chain, with criminal and congressional investigations still ongoing.
Alafco’s owners include Kuwait Finance House, Gulf Investment Corporation and state airline Kuwait Airways, according to its website.