Al-Kazemi’s advisor: Repetition of the scenario of global economic closure is out of the question
political Today, 20:25
Baghdad - conscious - Nassar al-Hajj
Today, Monday, the financial advisor to the Prime Minister, Mazhar Salih, presented his expectations regarding the conditions of the oil market and the Iraqi economy, with the emergence of the new Corona mutator and fears of returning to general closure in most countries of the world and stopping the movement of travel, and while he suggested not to return to a comprehensive economic closure as happened in 2020, he indicated That oil prices will go towards stability.
Saleh told the Iraqi News Agency (INA), that "the white paper is a medium-term reform approach and at the same time an expression of the state's policy in the face of the problems of our rentier economy, which, despite the state of optimism in oil prices, is still subject to the risks of fluctuations in the energy market in the world and the surprises that you might get."
He added, "Despite that, I do not think that the world will witness a complete economic shutdown and coexist with serious recessions similar to what happened in 2020, as the global economy will provide better movement and activity mechanics than last year, and during 2022 we expect to conduct economic activity at the level of countries in the world."".
He pointed out that "there may be very legitimate global cautionary concerns to prevent the corona pandemic and hedge its effects, but perhaps these precautions may hide some strategies of oil-consuming countries to reduce the excess demand for energy resources, including crude oil, as an aid to confront the escalation of prices."
"It is a tactical matter that may succeed in slowing the pace of the increase in oil prices in order to stabilize them within the equilibrium of the energy market without the expected price increases," he added.
Earlier, Adviser to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, explained the extent to which Iraq and the oil market were affected by the fluctuation of its prices due to the continuing economic and commercial competition and dispute between China and the United States of America.
Saleh told the Iraqi News Agency (INA), that "there is a cycle of oil assets that is still in the interest of the oil-producing countries, which is indicated by the continuous rises in the prices of energy resources, and oil prices and their accelerated growth correlate with the return of growth in the global economy and the high demand for crude oil to build and renew Various stocks that fell due to the global economic shutdown and the deterioration of international economic activity, specifically in 2020, due to the Corona pandemic.
He added, "The United States' liberation of part of its oil stocks comes to strengthen the oil supply and stabilize prices in conditions of still slow growth in GDP here and there, as the industrialized countries see that the rises in the growth of oil prices, which began to outweigh the economic growth in them, will lead to no referred to a dangerous state of stagflation in the coming days and is trying to contain oil prices within the limits that reduce the increase in demand surpluses or the demand gap in the current global oil market.
And despite the foregoing, the ongoing tension between the great powers producing and consuming oil remains an important player in deciding energy policies in the world, since the outbreak of the trade war between America and China during the era of President Donald Trump in 2018, which began after the announcement of the American president on 22 March 2018, intent to impose tariffs of US$50 billion on Chinese goods under Section 301 of the 1974 Trade Law which chronicles the history of unfair trade practices, intellectual property theft,
and in retaliation by the Chinese government, tariffs have been imposed on more than 128 American products, the most famous of which is soybeans.
He continued: "Here, it can be said, from a personal point of view, that weight in the oil equation between the two countries that constitute the forefront of the global economy in terms of gross domestic product and international trade and investment influence (the United States and China) requires looking at it, as the increase in oil prices will remain strategically in the interest of the United States.
The United States is the largest oil producer in the world and is able to produce 14 million barrels of crude oil per day, while China is one of the largest oil importers in the world and consumes about 14 million barrels of oil per day, most of it imported.”
And he added, "As oil prices will remain the weight of the egg between the largest producers (America) and the largest consumers (China) in the game of the trade war between them, and oil will remain as the first political and strategic commodity in the world and one of the tools of influence within the global economy whose prices cannot be easily compromised.
Therefore, the intervention of the United States by offering part of its reserve stocks came after the strengthening of supply and the opening of the OPEC countries with an additional offer, which enabled Iraq, for example, to produce an additional 400,000 barrels out of its total production of more than 4 million barrels of oil per day.
He pointed out that "all of this aims to bring about stability and balance in the energy market in proportion to the desired growth and stability in the global economy and to avoid dangerous phenomena such as (stagflation) referred to above due to the continuing rising energy costs in the world due to the demand gap for energy resources."