Iraq, OPEC’s second-largest oil producer, plans to lower its oil price benchmark in the 2025 federal budget from the previous $80 per barrel due to the recent market downturn. According to Prime Minister’s adviser Mudher Saleh, the decision had been delayed by talks over payments to oil companies.
Oil prices have fallen sharply, with Brent crude down 13% in April, driven by concerns over a global recession amid U.S. President Trump’s new tariffs.In mid-2023, Iraq’s parliament approved a multi-year spending plan extending through 2025. The 2023 budget was based on a crude oil price of $70 per barrel, with provisions for adjustments in subsequent years. Currently, Brent crude is trading below $65 per barrel in London.
This price decline places added strain on oil-dependent Middle Eastern economies. Iraq, in particular, relies on higher oil revenues to fund reconstruction efforts following years of conflict.In the semi-autonomous Kurdish region, international oil companies were forced to suspend exports after a key pipeline to Turkey’s Ceyhan port was shut down in early 2023.
They are now in negotiations with both federal and regional governments to resume operations.According to adviser Mudher Saleh, the revised budget will soon be submitted to parliament for final approval.
