Iraq oil earnings slashed in half in March after price crash

Iraq's revenues from crude sales dropped by nearly half in March, its oil ministry said Wednesday, as a global price crash stokes fears of collapse for the petrol giant.

The second-biggest crude producer in the OPEC oil cartel, Iraq sold 105 million barrels in March, earning USD 2.99 billion, according to an oil ministry statement.

In February, it sold fewer barrels -- 98.3 million -- but earned nearly twice as much at USD 5.5 billion.

The difference is due to plummeting prices, with Brent North Sea crude sinking to $25.11 on Wednesday, the lowest price in 18 years.

The slump is due to a price war between major producers Saudi Arabia and Russia, as well as a drop in demand caused by the spread of the novel coronavirus.

Iraqi oil trades at about $4 less than the benchmark price, with Oil Minister Thamer Ghadban telling local media this week that his country's crude was selling for USD 21 a barrel.

That is worrisome for Iraq, where oil revenues make up more than 90 per cent of the state budget in the absence of significant alternative industries.

Officials had drafted a 2020 budget based on estimates Iraqi crude would sell for USD 56 per barrel.

At that rate, Iraq would face a monthly deficit of $4 billion just to keep the government running and pay salaries to its bloated public sector, the International Energy Agency estimated last month.

Iraqi officials have told AFP they are considering a range of cost-cutting measures to trim the budget but have yet to finalise their plans.