Pessimism Grows over Iraq’s Prospects for Resuming Oil Exports

An Iraqi petroleum products tanker (Iraqi News Agency) 
An Iraqi petroleum products tanker (Iraqi News Agency) 
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Pessimism Grows over Iraq’s Prospects for Resuming Oil Exports

An Iraqi petroleum products tanker (Iraqi News Agency) 
An Iraqi petroleum products tanker (Iraqi News Agency) 

A growing number of Iraqi oil and economic experts are voicing pessimism about the country’s ability to resume crude exports via the Gulf and the Strait of Hormuz, despite Iran’s announcement of an “exception” allowing Iraqi shipments to pass as those of a “friendly country”.

Iraq has suffered a sharp blow to its oil sector following the US-Israeli conflict with Iran and the closure of the Strait of Hormuz, losing roughly three-quarters of its exports. The country had been producing about 3.5 million barrels per day, but current export volumes have dropped to around one million barrels per day, most of which is diverted to domestic consumption.

More than 300,000 barrels per day are still exported via the Kurdistan Region through Türkiye’s Ceyhan port, while smaller quantities are transported overland by tanker trucks to Jordan and Syria.

As a result of the collapse in exports, Iraq is expected to face a monthly fiscal deficit of between $5 billion and $6 billion, placing the government under severe financial strain, economists say.

While Iran’s decision has been welcomed by its allies and sympathizers as a positive step for Iraq, sceptics argue that resuming exports is far more complex than a political declaration. They point to complex web of technical, security and logistical challenges involving maritime risk, insurance costs, shipping company behavior and contractual arrangements.

Security concerns remain acute. Despite the Iranian exemption, four oil facilities in the southern province of Basra were targeted by drone attacks over the past two days, reportedly carried out by Iran-backed armed factions seeking to pressure foreign companies to leave Iraq. The incidents raise questions about the consistency between Tehran’s declared position and the actions of allied groups on the ground.

Former oil ministry spokesman Assem Jihad said Iraq’s export capacity is governed by “fundamental realities” that make a swift return to normal operations unlikely.

In comments posted on Facebook, he noted that Iraq does not rely on its own fleet of supertankers to export crude. Instead, the State Organization for Marketing of Oil (SOMO) sells oil under contracts whereby buyers arrange shipping and lift cargoes from Iraqi ports.

The key issue, he explained, is not a lack of contracts but the reluctance of global shipping companies and tanker owners to enter what is now considered a high-risk zone. Even if buyers are willing, securing vessels prepared to dock at southern Iraqi ports or operate near conflict areas remains a major obstacle.

Insurance costs have also surged. Companies face steep premiums for vessels transiting conflict zones, discouraging participation. “Even with statements allowing passage, that does not necessarily translate into a safe and secure shipping environment,” Jihad said, adding that insurers and shipping firms base decisions on actual risk assessments rather than political assurances.

He argued that exports would only resume once confidence returns to maritime markets, risks decline and insurance costs fall.

Economic researcher Ziad al-Hashimi outlined additional barriers preventing Iraq from benefiting from the Iranian decision.

Writing on X, he said Iraq’s oil production, service companies and southern export terminals are currently operating under “force majeure”, a status declared on March 20 across fields run by foreign firms. Lifting this clause could take time, as companies would require assurances that operations will not be targeted again.

“Its removal is not a quick process,” he noted, warning of “real risk” if exports resume without improved security guarantees.

Al-Hashimi also pointed to ongoing attacks on oil fields, saying that many service companies have evacuated staff and suspended operations. “Work will not return to normal as long as the war continues,” he underlined.

He further questioned the practicality of Iran’s exemption, which applies to loaded Iraqi tankers exiting Hormuz. “How will empty vessels enter the strait to reach Iraq, and who will guarantee their safety?” he asked.

The government and oil ministry have meanwhile faced criticism for failing to take precautionary measures to safeguard production, Iraq’s main source of national income. Critics say Baghdad should have diversified export routes or maintained floating storage capacity, as many oil-producing countries do.

According to Basra-based economist Nabil al-Marsoumi, Iraq’s state tanker company, established in 1972, currently owns just six vessels for refined products with a combined capacity of 117,000 tons. Four of these ships are over 15 years old, requiring more frequent maintenance.

The company no longer owns any crude oil tankers, he added, compared with 25 vessels totaling 1.485 million tons in 1983.

On the diplomatic front, Foreign Minister Fuad Hussein on Sunday thanked Iran for allowing Iraqi oil tankers to transit Hormuz during a meeting with Iranian ambassador Mohammad Kazem Al Sadeq.

A foreign ministry statement said the two sides discussed mechanisms to ensure implementation of the arrangement and broader regional developments. Hussein reiterated Iraq’s opposition to war and stressed the need for dialogue and peaceful conflict resolution.

Separately, data from the London Stock Exchange Group and analytics firm Kpler indicated that a tanker carrying Iraqi crude had passed through the Strait of Hormuz near Iran’s coast. The vessel, Ocean Thunder, loaded about one million barrels of Basra Heavy crude on March 2 and is expected to discharge in Malaysia in mid-April.

 

 



Turkish Inflation Rises to 2.58% in October, Driven by Clothing and Food Prices

People shop at Eminonu district in Istanbul, Türkiye, November 4, 2022. (Reuters)
People shop at Eminonu district in Istanbul, Türkiye, November 4, 2022. (Reuters)
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Turkish Inflation Rises to 2.58% in October, Driven by Clothing and Food Prices

People shop at Eminonu district in Istanbul, Türkiye, November 4, 2022. (Reuters)
People shop at Eminonu district in Istanbul, Türkiye, November 4, 2022. (Reuters)

Turkish consumer price inflation climbed to 2.58% month-on-month in October, above expectations and driven by clothing and food price rises, while the annual figure was 29.77%, data from the Turkish Statistical Institute showed on Tuesday.

Clothing and footwear prices surged 12.58% during the month, while food prices rose 3.5% and transport prices were ‌up 2.02%.

In ‌a Reuters poll, monthly ‌consumer ⁠price inflation was forecast to ⁠be 2.4%, driven by higher energy price pressures as well as seasonally higher clothing and food prices, and the annual rate was seen at 29.56%.

In September, consumer prices rose 1.84% month-on-month and 29.73% year-on-year, ⁠below forecasts.

The lira stood at ‌49.9975 against the ‌dollar after the data, compared with a close ‌of 49.9725 on Monday.

The poll's median ‌estimate sees annual inflation at 29.57% by the end of 2026.

Türkiye's central bank kept its year-end interim inflation target at 24% while raising its ‌year-end inflation forecast to 28% in its third inflation report published ⁠in ⁠August.

Last Friday, the central bank said higher energy and commodity prices driven by geopolitical tensions continued to pose upside risks to inflation, a week after it cut its policy rate by 100 basis points to 36% at its October 22 meeting, its first cut since January.

Tuesday's data also showed the domestic producer price index rose 1.65% month-on-month in October for an annual increase of 27.41%.


German Auto Crisis Deepens as Supplier Announces Job Cuts, Site Closures

05 November 2024, Bavaria, Herzogenaurach: A view of the headquarters of automotive and industrial supplier Schaeffler in Franconia. (dpa)
05 November 2024, Bavaria, Herzogenaurach: A view of the headquarters of automotive and industrial supplier Schaeffler in Franconia. (dpa)
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German Auto Crisis Deepens as Supplier Announces Job Cuts, Site Closures

05 November 2024, Bavaria, Herzogenaurach: A view of the headquarters of automotive and industrial supplier Schaeffler in Franconia. (dpa)
05 November 2024, Bavaria, Herzogenaurach: A view of the headquarters of automotive and industrial supplier Schaeffler in Franconia. (dpa)

German auto parts supplier Schaeffler said Tuesday that it planned to cut almost 3,500 jobs and close five sites in Europe as the crisis gripping the region's car industry deepens.

Like other German carmakers and suppliers, the group has struggled with competition for its key products, which include ball bearings and electric vehicle parts, especially from Chinese manufacturers.

Three-fourths of the 3,460 job cuts and four of the five site closures will be in Germany, the company said in a statement, pointing to "above-average" costs for workers in Europe's top economy.

The cuts, to be completed by 2028, are around three percent of the group's global workforce of almost 110,000. They should result in annual savings of around 300 million euros ($336 million) from 2030, it said.

Schaeffler, in a statement, said it was "responding to the persistently challenging environment in the automotive industry."

There was "an overall downturn in the market and intensifying competition... characterized by weakened demand for internal combustion engine vehicles and a delayed ramp-up of electric mobility," it added.

The cuts would be mainly focused on production and research and development.

Sites would be closed in Berlin, Dortmund, and two other towns in western Germany. A small site in Belgium will also be shuttered.

There will also be job cuts at sites in France and Slovakia.

Schaeffler said some of the job losses would be offset by the creation of positions in "future-oriented fields", such as humanoid robotics and defense.

While not as well-known as the car titans they work with, such as Volkswagen, BMW and Mercedes, Germany's suppliers are a crucial part of the auto ecosystem, providing everything from braking systems to in-car electronics.

But as their customers have fallen into crisis, battling Chinese competition, high production costs at home and weakening demand, suppliers have been hit hard.

Volkswagen is planning to cut around 120,000 jobs across its brands by 2030.

German industrial titan Bosch, the world's biggest supplier of car equipment, announced last year 13,000 job cuts, mostly in its auto division.


Oil Rises as Peace Prospects Dim after US Hits Iran's Qeshm Island

Oil rigs operating in the Atyrau region's Irankol field in Kazakhstan (Reuters)
Oil rigs operating in the Atyrau region's Irankol field in Kazakhstan (Reuters)
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Oil Rises as Peace Prospects Dim after US Hits Iran's Qeshm Island

Oil rigs operating in the Atyrau region's Irankol field in Kazakhstan (Reuters)
Oil rigs operating in the Atyrau region's Irankol field in Kazakhstan (Reuters)

Oil prices rose more than $1 on Tuesday, as an Iranian official said a deal to the end the war was far off, while the United States struck Iran's Qeshm Island, fueling concerns over the escalation of hostilities and risks to energy supplies.

US West Texas Intermediate crude was up $1.6, or 1.66%, at $98.06 a barrel while Brent crude futures rose $1.84, or 1.76%, to $106.61 a barrel by 0744 GMT.

Both benchmarks had dropped more than 7% on ‌Monday as ‌talks between Iranian and Qatar officials lifted hopes for an ‌end ⁠to the US-Israeli war ⁠with Iran that were soon dashed.

A US official said on Monday the US had struck Iran's Qeshm Island. Some officials described the assaults as defensive and aimed at preventing Iran from attacking commercial ships in the Strait of Hormuz.

On Tuesday, a senior Iranian official told Reuters that both countries were far from reaching a deal to end the war, and Tehran would not accept Washington's "excessive demands".

Iran's ⁠parliament speaker Qalibaf said Tehran had given Washington a "strong and ‌rational response," adding, "The ball is in the US' ‌court," according to state media.

"The report added a degree of risk premium back ‌into the oil price," said Tim Waterer, chief market analyst at KCM ‌Trade.

"Just when markets were starting to price in a more diplomatic path, this reminder of ongoing military activity has flipped the tone."

The war started in late February has become a leading cause of high gasoline prices weighing on voters, and Trump is under pressure ‌to end the conflict, with mid-term elections set for Tuesday.

"For now, the risk of supply disruptions continues to provide a ⁠floor for prices, ⁠while uncertainty over Washington's next move, political developments and traders' reluctance to carry aggressive positions are capping the upside," said Priyanka Sachdeva, head of market insight at Phillip Nova.

Brent ended October at its highest in six months on concerns that the conflict could escalate again after the US midterm elections.

A Ukrainian drone attack damaged an oil refinery in the Russian city of Yaroslavl, governor Mikhail Evrayev said on Tuesday.

Russia launched a massive overnight strike on Ukrainian energy facilities in the Vinnytsia, Dnipropetrovsk and Kharkiv regions, Interfax news agency said, citing the defense ministry.

Additionally, the US will bring together delegations from Ukraine and Russia in Abu Dhabi on November 10 and 11 to discuss ending the war, post-war security pacts and de-escalation efforts.