Oil price drop causes $43bn cut in Iraq's budget

Iraq’s budget for 2015 has fallen to $100 billion due to the ongoing drop in oil prices, according to a member of the country’s parliamentary finance committee.

On Tuesday, Iraq’s cabinet approved the country’s 2015 budget, which included a $43 billion reduction from last year.

Ahmed Haji Rashid said: “The drop in oil prices directly affects Iraq’s budget – which is dependent on oil revenues,” identifying a decrease in the country’s daily production level as the main driver behind the cut.

He stated that there had been a decrease of 100,000 barrels from 3.4 million in 2014’s daily oil production. With additional drivers, this has caused a 30 percent restriction in Iraq’s annual budget, Rashid added.

The Kurdish Regional Government will receive $13 billion from the annual budget, said Iraq’s culture minister Firyad Rewandizi, in a statement.

The budget was set at $100 billion according to anticipated $60-per-barrel oil prices in 2015, the minister added.

Iraq wants to hike oil production up to 4 million barrels per day, from its current level of over 3 million barrels daily. It has already increased its oil output by 500,000 barrels since the end of 2011 despite ongoing violence in the country.