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Iraq’s oil revenues in April plummeted to under $1.5 billion, the oil ministry announced Friday, less than a fifth of hydrocarbon income earned in the same month last year.
The OPEC cartel’s second-biggest crude producer has been left reeling by the worldwide crash in crude oil prices.
Iraq sold 103.1 million barrels in April at an average price of $13.80 per barrel, earning the country $1.4 billion.
That sum is half of what it raked in for the month of March — $2.99 billion — which in turn was about half of February’s oil revenues.
Iraq sells various grades of crude oil, and some barrels were sold in April for less than $5, according to a government official who had seen oil ministry figures.
The low revenues will likely be catastrophic for Iraq, which relies on its oil sales to fund more than 90 percent of government expenses.
It had drafted a 2020 budget last year based on prices at $56 per barrel, but the draft was never passed and a caretaker cabinet is now scrambling to introduce emergency measures, including possible cuts to employee benefits.
The government is the country’s biggest employer, with at least four million people on its payroll and another four million who receive pensions or social benefits.
April’s revenues were a third of what Iraq needs in order to pay public salaries and keep the government running.
The slump in world prices was brought on by a price war earlier this year between major producers Saudi Arabia and Russia, and an enormous drop in demand caused by the spread of the novel coronavirus.
OPEC agreed last month to introduce production cuts in May and June to try to revive prices, and Iraq will have to cut around one million barrels a day.
Its current production sits at around 4.5 million bpd, of which about 3.5 million are exported daily.
On Friday, the state-owned oil company in Iraq’s oil-rich province of Basra told local media it had already begun reducing output.
(BSS)
