Iraq’s Oil Revenues Drop by 17.6% in June
By NASSER KARIMI and RYAN LUCAS, ASSOCIATED PRESS | July 2, 2012 |
(BAGHDAD & TEHRAN, Iran) — Iraq says the country’s oil revenues have dropped by 17.6 percent from May to June due to plummeting oil prices and the diversion of some production to meet domestic needs.
Oil Ministry spokesman Assem Jihad said Monday that Iraq earned $6.453 billion in June compared to $7.831 billion in May.
He said June’s exports averaged 2.403 million barrels a day, down from an average of 2.452 million barrels in May. Domestic demand in Iraq usually increases during the hot summer months, mainly for running private generators.
Iraq holds the world’s fourth largest oil reserves, 143.1 billion barrels. Oil income makes up nearly 95 percent of its budget.
As new European Union sanctions targeting Iran’s vital oil industry took effect Sunday, Tehran acknowledged the measures aimed at reining in its disputed nuclear program were taking a toll. The vice president said authorities had stockpiled imported goods and hard currency to help cushion the blow to the economy.
The ban by the 27-member EU on the purchase of Iranian oil dealt the Islamic Republic its second economic setback in days, following fresh U.S. sanctions that prohibit the world’s banks from completing oil transactions with Iranian banks. Combined, the measures significantly ratchet up the pressure on an Iranian economy already squeezed by previous rounds of sanctions.
“Today, we are facing the heaviest of sanctions, and we ask people to help officials in this battle,” Vice President Mohammad Reza Rahimi was quoted as saying on state television’s website.
He said the “dastardly sanctions” might cause “occasional confusion” in the domestic market. Iran reacted furiously when the U.S. and EU sanctions were announced, threatening to block the strategic Strait of Hormuz, a vital waterway used to ship about one-fifth of the world’s oil. On Sunday Iranian officials appeared to be backing away from that threat, which roiled international oil markets at the time...
Last week, U.S. Secretary of State Hillary Rodham Clinton said Iranian crude exports have dropped to 1.5 million barrels a day from 2.5 million barrels last year, which comes out to almost $32 billion in revenue lost over a year.
The Iranian rial has slumped against international currencies, with the unofficial rate spiking at around 21,000 to the dollar this week, up from around 19,000. That’s down from a high of around 23,000 in January, but still far above the rate of around 11,000 about 18 months ago.
The price of staples has skyrocketed as well. Since the EU first announced its embargo in January, Iranian government figures show the prices of bread, milk and meat have risen around 20 percent, while the price of chicken has jumped some 80 percent.
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Iraq’s Oil Revenues Drop by 17.6% in June | World | TIME.com
