Iraq's parliament grants vote of confidence to new cabinet without an oil minister

Dubai — Iraq's parliament early Thursday granted a vote of confidence to the cabinet of Prime Minister Mustafa al-Kadhimi and most of his chosen ministers, but decided to postpone the vote for the oil minister of OPEC's second-largest oil producer, the state-run Iraqi News Agency reported.

Kadhimi, formerly the intelligence chief, had struggled to nominate an oil minister that is accepted by the political parties and many of his nominations for the vital office have been rejected.

Iraqi President Barham Saleh appointed Kadhimi in April after his two last choices for prime minister withdrew their candidacy amid political opposition to their nomination.

Kadhimi will take over from the government of Adel Abdul Madhi, who has run the affairs of the country in a caretaker role since December after resigning in the face of mounting protests demanding political and economic change.

The new prime minister has a host of economic and oil issues to juggle, including an internal backlash against Iraq's acceptance of large OPEC+ cuts starting in May that has sparked criticism among politicians.

Plunging revenue

Iraq's oil revenue has plunged in March and April amid the oil price crash, raising fears of the country's ability to survive economically and also to pay its dues to international oil companies operating its biggest fields.

Iraq's oil revenue in April stood at $1.423 billion, a drastic fall from March revenue of $2.962 billion. Average oil prices in April were $13.80/b, compared with $28.18/b in March.

In 2019, the federal government's monthly oil export revenue averaged $6.794 billion and the oil price averaged $61.13/b.

Iraq is also locked in a dispute with the semi-autonomous Kurdistan Regional Government over oil sales and distribution of oil revenue.

Iraq has insisted that the KRG contribute to the OPEC+ cuts for the country, which start at 1.061 million b/d for May and June and gradually decline through to April 2022.

The country took the biggest hit to production for OPEC members in April, losing 110,000 b/d as low fuel demand and a lack of product storage space forced its refineries to severely lower crude runs, according to the latest S&P Global Platts OPEC survey. Production was 4.54 million b/d in April.