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Iraq, Saudi, Russia Stress Need for Stable Oil Market ahead of OPEC+ Meeting

A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration
A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration
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Iraq, Saudi, Russia Stress Need for Stable Oil Market ahead of OPEC+ Meeting

A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration
A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration

OPEC+ members Iraq, Saudi Arabia and Russia agreed in a meeting in Iraq on Tuesday on the importance of maintaining stable oil markets and fair prices, Iraq's Prime Minister Office said on Tuesday.

The talks come ahead of Sunday's meeting of OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, where OPEC+ sources say it will weigh a possible further delay to plans to raise oil output.

Iraqi Prime Minister Mohammed Shia al-Sudani, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman, and Russian Deputy Prime Minister Alexander Novak attended the meeting.

They discussed "the conditions of global energy markets and matters related to the production of crude oil, its flow to markets, and meeting demand," the prime minister's office said, Reuters reported.

"The importance of maintaining stability, balance, and fair prices was emphasised, while stressing the vital role played by the OPEC+ group in this regard," the office added.

Russian energy minister Sergei Tsivilev and deputy energy minister Pavel Sorokin were also present, according to a photo posted on the X account of the Iraqi prime minister's media office.

OPEC+, which pumps around half the world's oil, has already delayed a plan to gradually lift production by several months this year because of falling prices, weak demand and rising production outside the group.

Despite OPEC+'s cuts and delays to output hikes, oil prices have mostly stayed in a $70-$80 per barrel range this year and on Tuesday were trading below $74 a barrel, not far above a 2024 low reached in September.

Azerbaijan's Energy Minister Parviz Shahbazov told Reuters on Monday OPEC+ may at Sunday's meeting consider leaving its current oil output cuts in place from Jan. 1. The meeting will be held online, OPEC+ sources said.

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Argentina Seals $20 Billion IMF Deal, Tears Down Currency Controls

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva and Argentina's President Javier Milei talk ahead of a session on Artificial Intelligence (AI), Energy, Africa and Mediterranean on the second day of the G7 summit in Borgo Egnazia, Italy, June 14, 2024. (Reuters)
Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva and Argentina's President Javier Milei talk ahead of a session on Artificial Intelligence (AI), Energy, Africa and Mediterranean on the second day of the G7 summit in Borgo Egnazia, Italy, June 14, 2024. (Reuters)
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Argentina Seals $20 Billion IMF Deal, Tears Down Currency Controls

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva and Argentina's President Javier Milei talk ahead of a session on Artificial Intelligence (AI), Energy, Africa and Mediterranean on the second day of the G7 summit in Borgo Egnazia, Italy, June 14, 2024. (Reuters)
Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva and Argentina's President Javier Milei talk ahead of a session on Artificial Intelligence (AI), Energy, Africa and Mediterranean on the second day of the G7 summit in Borgo Egnazia, Italy, June 14, 2024. (Reuters)

Argentina sealed a $20 billion, 48-month Extended Fund Facility deal with the International Monetary Fund on Friday and, in a major policy move ahead of the deal, dismantled key parts of its years-long currency controls and loosened its grip on the peso.

The IMF will disburse $12 billion by next Tuesday, while another $2 billion will become available by June.

The deal is expected to help Argentina "catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets," the IMF said.

"Key pillars of the program include maintaining a strong fiscal anchor, transitioning towards a more robust monetary and FX regime, with greater exchange rate flexibility," it added in a statement.

Earlier, the South American nation's central bank announced it would undo a fixed currency peg from Monday, letting the peso freely fluctuate within a moving band between 1,000 and 1,400 pesos per dollar, versus 1,074 at the close on Friday.

Argentina will eliminate major parts of the so-called "cepo" capital controls that have restricted access to foreign currency, the central bank said in a statement.

Companies, from this year, will also be able to repatriate profits out of the country, a key demand from businesses that could unlock more investment.

"As of Monday, we will be able to put an end to the foreign exchange restrictions which were imposed in 2019 and which limit the normal functioning of the economy," Economy Ministry Luis Caputo said at a press conference.

Libertarian President Javier Milei addressed the nation in a televised speech on Friday night and stated that Argentina was "in a better position than ever to withstand external turbulences."

However, an IMF staff report on the $20 billion deal warned that "downside risks remain elevated," as program implementation could be challenged by rising global trade tensions and, domestically, by the volatility added by the upcoming electoral cycle and fragile social conditions.

'THIS IS A DEVALUATION'

The new exchange rate system could allow the peso to weaken almost a third if the currency were to hit the weaker edge of the band, although the central bank is likely to have some tools to intervene. The band will expand 1% each month, the bank said.

The policy move came ahead of the final IMF nod for what is the 23rd program in a long and mottled history between the grains-producing nation and the Washington-based lender.

Funds from the IMF deal will be used to recapitalize Argentina's central bank and the government expects they will help usher in a healthier currency, reduce inflation and allow for tax cuts, Caputo said.

Other multi-year disbursements were also announced, including $12 billion from the World Bank and $10 billion from the Inter-American Development Bank.

Argentina needs the financial firepower to bolster depleted foreign currency reserves that are in the red on a net basis and have been falling in recent weeks, amid sticky inflation and a country risk index that has started to rise again.

The funds are also key to unlocking the currency controls, which will likely prompt a period of local market volatility already stirred up by the international tariff war between the United States and its trade partners.

"This is a devaluation, which rather goes against what the government would have intended to calmly get to elections," said economist Ricardo Delgado, referring to midterm legislative elections later in the year.

"It's a bit surprising that at this time of global volatility, the controls are being lifted," he added.