DUBAI/BAGHDAD/LONDON: A debate within Iraq over whether it should ask to be exempt from OPEC+ oil supply cuts has resurfaced as low prices squeeze its finances, challenging a government struggling to tackle the destruction of years of war and rampant corruption.
OPEC’s second-biggest producer, Iraq has failed in the past to fully comply with OPEC+ oil output reductions, pumping above its production targets since the pact was first signed in 2016 between OPEC and its allies led by Russia.
“Iraq always believed they were not properly treated in December 2016 when they were not exempted. As the economy continues to reel from low prices this issue keeps resurfacing,” said an OPEC source.
Iraq’s economy and oil sector were battered by years of wars, sanctions and a stubborn Islamist insurgency triggered by the US invasion. Baghdad complained it had struggled to revive its stagnating oil industry, at a time where other OPEC members benefited and boosted their market share.
Iraq relies on oil to fund 97% of its state budget. Iraqi Finance Minister Ali Allawi told parliament on Wednesday that reforming Iraq’s economy would take five years of work and that state debt amounted to 80-90% of national product, while foreign debt was at $133 billion.
From May 1, the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, made a record cut of 9.7 million bpd, or 10% of global output, after the coronaries destroyed a third of world demand. From Aug. 1, the cut tapered to 7.7 million bpd until December.
Iraqi politicians have criticized the pact which was signed by the previous caretaker government under which Baghdad had committed to a big cut in its output.
With oil prices currently trading at around $40 a barrel, opposition to the oil cuts is rising behind closed doors and talks of reviving old calls to review the size of the reductions have resurfaced, Iraq and OPEC sources told Reuters.
A senior Iraqi official with knowledge of the talks said there were differing views between the oil ministry and the prime minister’s office over whether to fully comply with the cuts or ask for an exemption for next year.
The oil ministry wants to ask for an exemption, the official, who declined to be identified, said, while officials in the prime minister’s office insist on compliance.
The disagreement revolves around Iraq’s current financial issues, the official added.
In May and June, Iraq had agreed to reduce its crude output by just over 1 million barrel per day, which would then ease to 849,000 bpd from July until end of the year.
Iraq has continued as a member of the deal but has overproduced above its quota.
But now Iraq needs to fully comply with the agreed output targets and even compensate for its previous overproduction in May-July by cutting deeper for the following months.
“There is strong opposition ... for their (Iraq’s) continued participation in the supply cuts,” the OPEC source said, adding that there has been unofficial talk about Baghdad’s need to seek an exemption from the oil cuts in 2021 but it was not clear whether Iraq would actually take that step or not.
In August, Iraq has reached its highest compliance in recent years but it has said it may need to extend the compensation period by two months.
Current Prime Minister Mustafa Al-Kadhimi took office in May, becoming the third Iraqi head of government in a chaotic 10-week period that followed months of deadly protests in the country, which has been exhausted by decades of sanctions, war, corruption and economic challenges.
Iraq’s oil ministry spokesman said last week that Baghdad remained fully committed to the OPEC+ oil supply cut agreement, denying a media report that it was seeking an exemption from the reduction pact during the first quarter of 2021.
In June, Iraq has said it asked OPEC to take into consideration the members’ economic situation in sharing the burden of future oil cuts.
The World Bank estimates Iraq’s economy will shrink 9.7% in 2020 on back of lower oil prices and coronavirus, compared to 4.4% growth in 2019.
With a battered economy, Iraq debates its contribution to OPEC+ oil cuts
https://arab.news/8gygc
With a battered economy, Iraq debates its contribution to OPEC+ oil cuts
- Iraq’s economy and oil sector were battered by years of wars, sanctions and a stubborn Islamist insurgency triggered by the US invasion
- In May and June, Iraq had agreed to reduce its crude output by just over 1 million barrel per day, which would then ease to 849,000 bpd from July until end of the year.
Saudi Arabia leads outcome-based education to prepare future-ready generations: Harvard Business Review
- The Riyadh-based school group developed a strategy that links every classroom activity to measurable student competencies, aiming to graduate learners equipped for the digital economy and real-world contexts
RIYADH: Saudi Arabia’s education system is undergoing a sweeping transformation aligned with Vision 2030, shifting from traditional, input-focused methods to outcome-based education designed to equip students with future-ready skills, Harvard Business Review Arabic reported.
The transformation is being adopted and spearheaded by institutions such as Al-Nobala Private Schools, which introduced the Kingdom’s first national “learning outcomes framework,” aimed at preparing a generation of leaders and innovators for an AI-driven future, the report said.
Al-Nobala has leveraged international expertise to localize advanced learning methodologies.
The Riyadh-based school group developed a strategy that links every classroom activity to measurable student competencies, aiming to graduate learners equipped for the digital economy and real-world contexts. The school’s group approach combines traditional values with 21st-century skills such as critical thinking, communication, innovation and digital fluency.
According to the report, the shift addresses the growing gap between outdated models built for low-tech, resource-constrained environments and today’s dynamic world, where learners must navigate real-time information, virtual platforms, and smart technologies.
“This is not just about teaching content, it’s about creating impact,” the report noted, citing how Al-Nobala’s model prepares students to thrive in an AI-driven world while aligning with national priorities.
The report noted that Saudi Arabia’s Ministry of Education has paved the way for this shift by transitioning from a centralized controller to a strategic enabler, allowing schools such as Al-Nobala to tailor their curriculum to meet evolving market and societal needs. This is part of the long-term goal to place the Kingdom among the top 20 global education systems.
Al-Nobala’s work, the report stated, has succeeded in serving the broader national effort to link education outcomes directly to labor market demands, helping to fulfill the Vision 2030 pillar of building a vibrant society with a thriving economy driven by knowledge and innovation.
Last February, Yousef bin Abdullah Al-Benyan, Saudi Arabia’s minister of education, said that the Kingdom was making “an unprecedented investment in education,” with spending aligned to the needs of growth and development. He said that in 2025, education received the second-largest share of the state budget, totaling $53.5 billion.
