Iraqi president starts new search for prime minister after Allawi declines offer

Dubai — Iraqi President Barham Saleh has started 15 days of consultations to nominate a prime minister after Mohammed Allawi declined the post following failure to gain a parliamentary vote of confidence for his cabinet, state-run Iraqi News Agency reported Monday.

Saleh had appointed Allawi to be prime minister-designate in February after the resignation of outgoing prime minister Adel Abdul Madhi in November in the face of mounting protests demanding political and economic change. Abdul Madhi will announce on Monday whether the government will stay in a caretaker role, INA reported.

A number of parliamentary blocs did not show up to the parliamentary session to grant Allawi a vote a confidence for a second time on Sunday, leading to a lack of quorum, INA reported. Allawi had picked a cabinet of what he called "independents" without political interference but failed to win over some parliamentarians.

Allawi said on Twitter some political parties were standing in the way of "reform" and placing hurdles for the formation of a new "independent" government.

OPEC+ compliance

The potential political vacuum in Iraq means OPEC's second-largest oil producer may operate without an oil minister, if outgoing oil minister and deputy minister for energy affairs, Thamer Ghadhban, does not retain his post, which he has held since November 2018.

Allawi's choice for oil minister was Husain al-Chalabi, a 73-year old consultant with over 50 years' experience in the oil and gas industry. He has had his own consultancy since 1990 and previously worked for Shell, Petronas and Chevron.

The squabbling over the government leadership comes at a time when Iraq has mostly produced more crude than its agreed limit of 4.46 million b/d under an accord running from January through March.

OPEC+, led by Saudi Arabia and Russia, are in the midst of trimming global output by 1.7 million b/d to soak up excess supply in the first quarter. The alliance is also mulling shaving another 600,000 b/d from their output due to anticipated drop in oil demand in top oil importer China, where the outbreak of the deadly coronavirus has crimped economic growth.

In February, Iraq said its January production fell 70,000 b/d to 4.47 million b/d, still above its OPEC+ quota.

The latest S&P Global Platts OPEC survey also showed overproduction in January at 4.6 million b/d, breaking a four-month trend of improving compliance.