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Iraqi central bank to drop dollar for yuan in trade with China
Iraqi central bank to drop dollar for yuan in trade with China
(Photo credit: AFP)
The Iraqi central bank announced on 22 February that, for the first time, it plans to allow trade from China to be settled directly in yuan instead of the US dollar to improve access to foreign currency.
“It is the first time imports would be financed from China in yuan, as Iraqi imports from China have been financed in (US) dollars only,” the government’s economic adviser, Mudhir Salih, told Reuters on 22 February.
According to a statement released by the Iraqi central bank, carrying out transactions in the Chinese currency would boost the balances of Iraqi banks with accounts with Chinese banks.
However, this option depends on the size of the central bank’s yuan reserves.
A second option to boost local banks’ yuan balances would involve converting US dollars held in the central bank’s accounts with JP Morgan and the Development Bank of Singapore (DBS) to yuan before paying the final beneficiary in China.
The Iraqi central bank has been on a mad dash to compensate for a dollar shortage in local markets. This crisis prompted the cabinet to approve a currency revaluation earlier this month.
Last year, the US Treasury and the Federal Reserve Bank of New York began enforcing stricter controls on international transactions by Iraqi commercial banks, forcing them to comply with specific SWIFT global transfer system criteria to access their foreign reserves.
The move was allegedly meant to “curtail money laundering and the illegal siphoning of dollars to Iran and other heavily sanctioned [West Asian] countries.” However, the sudden rules change for Iraqi banks sent the economy reeling as 80 percent, or more of Iraq’s daily US dollar wire transfers could no longer be completed.
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OPEC Production Fell In November, But 3 Members Actually Boosted Output
OPEC Production Fell In November, But 3 Members Actually Boosted Output
OPEC’s crude oil production fell by an average of 744,000 barrels per day, according to OPEC’s Monthly Oil Market Report released on Tuesday.
Saudi Arabia’s November production fell by the most among its members, by 404,000 bpd, to 10.474 million bpd—Saudi Arabia’s lowest monthly average since May 2022.
Other significant production decreases were realized by the United Arab Emirates, which saw a decrease of 149,000 bpd in November, landing at 3.037 million bpd; Kuwait, which saw a dip of 121,000 bpd to 2.685 million bpd; and Iraq with a loss of 117,000 bpd to 4.465 million bpd.
Overall, OPEC’s average production for November fell to 28.826 million bpd—the lowest average production level since June.
While the overall production was significantly lower for November and largely in line with OPEC’s plan to reduce output in response to market conditions, a handful of members increased their production.
Libya’s production also decreased by 32,000 bpd, to 1.133 million bpd. Earlier this week, Libya’s oil minister said its oil production was 1.2 million bpd. “We hope to return to 2010 levels, which was 1.6 million bpd, within two or three years,” Oil Minister Mohamed Oun told reporters on Monday.
Libya lifted its force majeure on oil and gas last exploration last week in hopes of luring foreign oil companies back into the country that has seen significant unrest in recent years.
Angola, Gabon, and Nigeria went the other way, increasing their production by a collective 132,000 bpd.
While OPEC saw its overall crude production fall, non-OPEC liquids production, according to OPEC’s latest report, increased month on month in November by 800,000 bpd to 72.7 million bpd. This figure is also 2.1 million bpd higher than the same month last year.
This means that OPEC’s share of crude oil in the global production mix slipped by 0.7%, to 28.4% in November from the month prior.
Politics, climate conspire as Tigris and Euphrates dwindle
DAWWAYAH, Iraq and ILISU DAM, Turkey (AP) — Next year, the water will come. The pipes have been laid to Ata Yigit’s sprawling farm in Turkey’s southeast connecting it to a dam on the Euphrates River. A dream, soon to become a reality, he says.
He’s already grown a small corn patch on some of the water. The golden stalks are tall and abundant. “The kernels are big,” he says, proudly. Soon he’ll be able to water all his fields.
Over 1,000 kilometers (625 miles) downstream in southern Iraq, nothing grows anymore in Obeid Hafez’s wheat farm. The water stopped coming a year ago, the 95-year-old said, straining to speak.
“The last time we planted the seed, it went green, then suddenly it died,” he said.
The starkly different realities are playing out along the length of the Tigris-Euphrates river basin, one of the world’s most vulnerable watersheds. River flows have fallen by 40% in the past four decades as the states along its length — Turkey, Syria, Iran and Iraq — pursue rapid, unilateral development of the waters’ use.
The drop is projected to worsen as temperatures rise from climate change. Both Turkey and Iraq, the two biggest consumers, acknowledge they must cooperate to preserve the river system that some 60 million people rely on to sustain their lives.
But political failures and intransigence conspire to prevent a deal sharing the rivers.
The Associated Press conducted more than a dozen interviews in both countries, from top water envoys and senior officials to local farmers, and gained exclusive visits to controversial dam projects…
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Oil Spikes To Fresh 7-Year High After Key Iraq-Turkey Pipeline Explosion
Oil Spikes To Fresh 7-Year High After Key Iraq-Turkey Pipeline Explosion
Despite dollar strength today (and more worrisome ZeroCOVID actions from China), oil prices continued to rise but news after-hours that an explosion knocked out a major pipeline sparked more upside.
Little is known about the cause, but the explosion at a pipeline connecting Northern Iraq and the port of Ceyhan in the Mediterranean has taken 450kb/d of supply offline in an already very tight crude oil market.
The pipelines have been halted before: Back in 2012 blasts blamed on saboteurs halted the link for several months.
The headlines sent oil prices spiking with WTI topping $86 for the first time since Oct 2014 (Brent neared $89)…
This news follows a ballistic missile attack over the weekend, where Iranian-backed Houthi rebels in Yemen targeted oil infrastructure in the UAE.
Pipeline operator Botas said the fire has been brought under control and cooling operations were under way.
Botas said the it would reopen once the “necessary measures” had been taken, but gave no indication of timing.
Cash-Strapped Iraq Drastically Devalues Dinar As Fears Of Nationwide Unrest Grow
Cash-Strapped Iraq Drastically Devalues Dinar As Fears Of Nationwide Unrest Grow
According to the latest IMF forecasts, Iraq’s GDP will contract 12% this year, more than that of any other OPEC member under a production quota.
A global pandemic-induced demand slump (among other domestic issues) has pushed Iraq – under its OPEC membership – to slash oil production by over 12% year-over-year (however, Iraq, along with other nations such as Nigeria, has pumped above its quota on several occasions since then).
In the most recent sign of Baghdad’s growing desperation for cash as its economy unravels, Iraq sought an upfront payment of about $2 billion in exchange for a long-term crude-supply contract as state coffers dwindle and school teachers go unpaid.
As Bloomberg reports, the letter from SOMO, the Iraqi state-owned agency in charge of petroleum exports, was first reported by the Iraq Oil Report.
“SOMO, on behalf of the Ministry of Oil, has the interest to propose a long-term crude-supply deal in exchange for prepayment for a fraction of the total allocated quantity,” according to the letter, which was marked strictly confidential.
The anxiety is rising as officials fear a repeat of the upheaval last year that brought down the government and saw hundreds of protesters killed.
All of which has led to the decision to devalue the Dinar… drastically.
As Bloomberg’s Khalid Al-Ansary reports, the central bank reduced the official rate to 1,450 dinar per dollar, the first devaluation since 2003, it said in a statement. That’s from about 1,190 previously. Dollars will be resold to local banks at 1,460 dinar apiece.
Inflation imminent? or hyperinflation?
The embattled nation’s central bank is taking the steps to avoid depleting its foreign-currency reserves…
Prime Minister Mustafa Al-Kadhimi, who came to power in May, has warned that the government will struggle to pay civil servants without raising more debt.
SCOTT RITTER: Powell & Iraq—Regime Change, Not Disarmament: The Fundamental Lie
SCOTT RITTER: Powell & Iraq—Regime Change, Not Disarmament: The Fundamental Lie
Regime change, not disarmament, was always the driving factor behind U.S. policy towards Saddam Hussein. Powell knew this because he helped craft the original policy.
The New York Times Magazine has published a puff piece soft-peddling former Secretary of State Colin Powell’s role in selling a war on Iraq to the UN Security Council using what turned out to be bad intelligence. “Colin Powell Still Wants Answers” is the title of the article, written by Robert Draper. “The analysts who provided the intelligence,” a sub-header to the article declares, “now say it was doubted inside the CIA at the time.”
Draper’s article is an extract from a book, To Start a War: How the Bush Administration Took America into Iraq, scheduled for publication later this month. In the interest of full disclosure, I was approached by Draper in 2018 about his interest in writing this book, and I agreed to be interviewed as part of his research. I have not yet read the book, but can note that, based upon the tone and content of his New York Times Magazine article, my words apparently carried little weight.
Regime Change, Not WMD
I spent some time articulating to Draper my contention that the issue with Saddam Hussein’s Iraq was never about weapons of mass destruction (WMD), but rather regime change, and that everything had to be viewed in the light of this reality—including Powell’s Feb. 5, 2003 presentation before the UN Security Council. Based upon the content of his article, I might as well have been talking to a brick wall.
…click on the above link to read the rest of the article…
Large Scale US Airstrikes Underway Against Iran-Backed Militias In Iraq
Large Scale US Airstrikes Underway Against Iran-Backed Militias In Iraq
After earlier in the day President Trump authorized the Pentagon to “do what we need to do” in terms of a military response against Iran-backed militias believed responsible for Wednesday’s rocket attacks on Camp Taji, which killed one British and two American soldiers, and wounded at least a dozen more, there are widespread reports the US has initiated massive airstrikes over southern Iraq late Thursday night.
A BBC correspondent in the region is describing “multiple strikes across Iran-backed groups’ facilities” which include “logistics and drone warehouses.”
Early reports suggest the attack includes “large amounts of munitions” on multiple Iraqi Shia militia targets. Moments after initial reports on social media US defense offcials confirmed that “airstrikes are underway against Iran-backed militia group that hit Iraq base,”according to the Associated Press.
Bombing #Iran-backed paramilitary group positions around #Karbala and #Salahaddin is significant. This is the largest amount of force I’ve seen against Hashd (#PMF) so far. These areas are considered “No fly zones” for #Coalition. Jets may have come from #UAE or #Kuwait
As if the Mideast region and the world for that matter needs another crisis to worry about, this could be the start of the kind of tit-for-tat between the US and Iran which paved the way for the US killing by drone of IRGC Quds Force chief Qassem Soleimani on January 3rd. Since then, the two have been on a war footing.
Defense Secretary Mark Esper hours ago warned the US would hold the groups behind Wednesday’s attack on Taji base accountable. “You don’t get to shoot at our bases and kill and wound Americans and get away with it,” he said earlier.
According to Fox News security correspondent Jennifer Griffin:
The US response will be “proportional” targeting multiple locations used by Iranian backed Shia militias across Iraq and along Syrian border.
Will be limited to airstrikes: source. Will degrade Shia militia/ Kata’eb Hezbollah ability to strike: US military source.
…click on the above link to read the rest of the article…
Anonymous sources and the guys and gals who made the Iraq war a reality are now claiming that the Kremlin is at it again!
Anonymous sources and the guys and gals who made the Iraq war a reality are now claiming that the Kremlin is at it again!
Those hapless individuals who run the United States are again slipping into a fantasy world where Americans are besieged by imaginary threats coming from both inside and outside the country. Of course, it is particularly convenient to warn of foreign threats, as it makes the people in government seem relevant and needed, but one might recommend that the tune be changed as it is getting a bit boring. After all, there are only so many hours in the day and Russian President Vladimir Putin must pause occasionally to eat or sleep, so the plotting to destroy American democracy must be on hold at least some of the time.
Yes, anonymous sources and the guys and gals who made the Iraq war a reality are now claiming that the Kremlin is at it again! Hints over the past year that Putin might try to replay 2016 in 2020 only do it better this time have now been confirmed! Per one news report the enemy is already at the gates: “U.S. intelligence officials told lawmakers last week that Russia is interfering in the 2020 election campaign by aiming to cast doubt on the integrity of the vote and boost President Donald Trump’s re-election.”
And there’s more! In a New York Times article headlined “Same Goal, Different Playbook: Why Russia Would Support Trump and Sanders: Vladimir Putin is eager both to take the sheen off U.S. democracy and for a counterpart who is less likely to challenge his territorial and nuclear ambitions,” it was revealed that the Kremlin is intending to also help Bernie Sanders, so whichever way the election goes they win.
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Iraq & Russia Look To Boost Military Ties While US Threatens Sanctions
Iraq & Russia Look To Boost Military Ties While US Threatens Sanctions
In more continuing fallout over the Jan.3 assassination by drone of the IRGC’s Gen. Qassem Soleimani, Iraq and Russia are preparing for deepening military coordination, reports the AP.
Iraq’s Defense Ministry announced Thursday that increased “cooperation and coordination” is being discussed with Moscow amid worsened relations with Washington, which even last month included President Trump issuing brazen threats of “very big” sanctions on Baghdad if American troops are kicked out of the country.
This week Iraqi army chief of staff Lt. Gen. Othman Al-Ghanimi and Russian Ambassador Maksim Maksimov met to discuss future military cooperation. Crucially, Gen. Ghanimi highlighted Russia’s successful anti-ISIS operations over the past years, especially in Syria where the Russian military has supported Assad since being invited there in 2015.
On Russia’s role in Iraq, Ghanimi said Moscow had provided “our armed forces with advanced and effective equipment and weapons that had a major role in resolving many battles,” according to the ministry statement.
It’s been long rumored that since late summer Baghdad and Moscow have been in talks to deliver either Russia’s advanced S-400 or S-300 anti-air missile defense systems – a prospect which US officials have condemned.
Like other areas of the Middle East, as US adventurism heightens pressure for a US withdrawal, Russia appears to be seizing the opportunity to move in. This much was affirmed in AP’s reporting, via at least one anonymous senior official:
A senior Iraqi military intelligence official told The Associated Press that Russia, among other countries, has come forward to offer military support in the wake of fraught US.-Iraq relations following Soleimani’s killing.
…click on the above link to read the rest of the article…
How the U.S. Regime and Its Allies Enforce Their Smears and Their Other Lies
How the U.S. Regime and Its Allies Enforce Their Smears and Their Other Lies
Without enforced suppression of truth, there would be no way that the U.S. and its allied regimes could continue hiding the lies that were behind their invasions of Iraq in 2003, and of Syria since 2012, and their coup against Ukraine in 2014, and also of their takeovers and attempted takeovers of other countries that had refused to be bullied by the U.S. regime into complying with its obsessive anti-Russian demands — America’s subterranean continuation of the Cold War, even after Russia had quit the Cold War in 1991.
All of the lies are still being propounded by the U.S. regime and remain fully enforced by suppression of the truth about these matters. That’s being done in all news-media except a few of the non-mainstream ones.
So: this is about an actual Western samizdat — the West’s equivalent to the former Soviet Union’s systematic, and equally pervasive, truth-suppression, to fool the public into thinking that the Government represents them, no matter how much it does not. (The chief trick in this regard is to fool them into thinking that since there is more than one political party, one of them will be “good,” even though the fact may actually be that each of the parties represents simply a different faction of a psychopathically evil aristocracy. After all: each party lied and supported invading Iraq in 2003, Libya in 2011, and Syria constantly; and no party acknowledges that the 2014 regime-change in Ukraine was a U.S. coup instead of a domestic Ukrainian democratic revolution. On such important matters, they all lie, and in basically the same ways. These lies are bipartisan, even though most of the other political lies are heavily partisan.)
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“No, No America” – Mass Protests Erupt In Baghdad Demanding U.S. Troops Withdraw
“No, No America” – Mass Protests Erupt In Baghdad Demanding U.S. Troops Withdraw
Al Jazeera English is reporting that thousands of Iraqi protesters have hit the street in Baghdad after the influential Shia cleric Muqtada al-Sadr called for a “million-strong” march to demand the withdraw of U.S. coalition forces from the country.
NBC News Tehran Bureau Chief & correspondent Ali Arouzi said hundreds of thousands of protesters marched across Baghdad on Friday, demanding U.S. troops leave the country and close all military bases and embassies.
100’s of thousands protest in Baghdad, calling for all US troops to leave Iraq, close all bases & embassies, if they don’t they will be considered an occupying force. pic.twitter.com/C3CqBqpxyD— Ali Arouzi (@aliarouzi) January 24, 2020
Iraqi Prime Minister Presses U.S. to Discuss Troop Withdrawal
Protestors held signs that read “no, no to America” and “no, no to occupation” amid a sea of nationalism and anti-Americanism erupting across the country’s capital.
Others were heard on loudspeakers blasting the phrase: “Death to America. Death to Israel.”
The presence of U.S. coalition forces in the country has become a hot subject since President Trump launched a drone attack on Iranian general Qassem Soleimani and Iraqi militia commander Abu Mahdi al-Muhandis, killing both, earlier this month near Baghdad International Airport.
The Green Zone, the International Zone of Baghdad and home of the U.S. embassy, has been peppered with rocket attacks since the killing of Soleimani.
Iraq’s parliament voted to expel all foreign troops, including 5,000 U.S. forces from the country, and asked the government to cancel assistance from the U.S.-led coalition that has been working with the Iraqi Army in the eradication of ISIS.
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Could ISIS Take Control Over This Large Iraqi Oil Field?
Could ISIS Take Control Over This Large Iraqi Oil Field?
As always, it’s the fear of sanctions that provides the leverage Trump seeks in this cat-and-mouse game with Iran. And this time, the leverage is over Iraq, which would like to see both American and Iranian forces out of the country, for obvious reasons.
There is nothing ISIS would love more than this.
It would also devastate Iraq because the sanctions threatened would include blocking access to Iraq’s U.S.-based account where all the oil revenues are kept. That threat stands if Iraq moves to kick U.S. forces out of the country.
That would mean victory for Iran (temporarily). Kicking out Iranian forces is not nearly as simple because the line between state and non-state actors is blurred, at best.
A few weeks ago, a U.S. drawdown of military forces in Iraq was already expected, but that now seems unlikely because of the implications.
The very military base that Iran attacked following the assassination of General Soleimani was already preparing for a drawdown.
In addition to the threat of sanctions on oil money, a U.S. withdrawal would likely open the door for an ISIS return.
What Iraqis Want
There is no consensus on this question, other than the fact that no one wants Iraq to be the proxy battleground between the United States and Iran.
It’s a fair point, and Iraqis have had a very difficult time enjoying anything close to sovereignty since the fall of Saddam Hussein.
While the Iraqi parliament has voted for U.S. troops to leave, they do not represent a unified voice. The Sunni elements of parliament did not participate in the vote. Neither did the Iraqi Kurds.
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After Missiles Fly, Iraq Becomes the Battleground
After Missiles Fly, Iraq Becomes the Battleground
The future of the U.S.’s involvement in the Middle East is in Iraq. The exchange of hostilities between the U.S. and Iran occurred wholly on Iraqi soil and it has become the site on which that war will continue.
Israel continues to up the ante on Iran, following President Trump’s lead by bombing Shia militias stationed near the Al Bukumai border crossing between Syria and Iraq.
The U.S. and Israel are determined this border crossing remains closed and have demonstrated just how far they are willing to go to prevent the free flow of goods and people across this border.
The regional allies of Iran are to be kept weak, divided and constantly under harassment.
Iraq is the battleground because the U.S. lost in Syria. Despite the presence of U.S. troops squatting on Syrian oil fields in Deir Ezzor province or the troops sitting in the desert protecting the Syrian border with Jordan, the Russians, Hezbollah and the Iranian Quds forces continue to reclaim territory previously lost to the Syrian government.
Now with Turkey redeploying its pet Salafist head-choppers from Idlib to Libya to fight General Haftar’s forces there to legitimize its claim to eastern Mediterannean gas deposits, the restoration of Syria’s territorial integrity west of the Euphrates River is nearly complete.
The defenders of Syria can soon transition into the rebuilders thereof, if allowed. And they didn’t do this alone, they had a silent partner in China the entire time.
And, if I look at this situation honestly, it was China stepping out from behind the shadows into the light that is your inciting incident for this chapter in Iraq’s story.
China moving in to sign a $10.1 billion deal with the Iraqi government to begin the reconstruction of its ruined oil and gas industry in exchange for oil is of vital importance.
…click on the above link to read the rest of the article…
“If The US Does That, It’ll Lose Iraq Forever” – Trump Threatened To Cut Off Baghdad’s Access To Its NY Fed Cash
“If The US Does That, It’ll Lose Iraq Forever” – Trump Threatened To Cut Off Baghdad’s Access To Its NY Fed Cash
After rejecting Iraqi Prime Minister Adel Abdul Mahdi’s request to begin talks on the withdrawal of American troops, there are now more signs of the eroding ties between the two countries.
The Wall Street Journal reports that according to Iraqi officials (yes, Iraq has anonymous sources too), the Trump administration warned Iraq this week that it risks losing access to a critical government bank account if Baghdad kicks out American forces.
We are sure, to Schiff et al., that sounds a lot like ‘quid pro quo’, but how will they balance the need to hammer the president with their neocon/establishment desire to keep boots on the ground, whatever it takes?
The warning regarding the Iraqi central bank account was conveyed to Iraq’s prime minister in a call on Wednesday, according to an official in his office, that also touched on the overall military, political and financial partnership between the two countries.
When Iraq needs hard currency, its central bank can request a shipment of bills that it then distributes into the financial system through banks and currency exchange houses. While the country’s official currency is the dinar, U.S. dollars are commonly used.
“The U.S. Fed basically has a stranglehold on the entire [Iraqi] economy,” said Shwan Taha, chairman of Iraqi investment bank Rabee Securities.
The potential economic and financial fallout is weighing on Iraqi officials
“Whenever you have any amicable divorce, you still have the worry about the children, pets, furniture and plants, some of which are sentimental,” said a senior Iraqi politician.
The New York Fed, which can freeze accounts under U.S. sanctions law or if it has reasonable suspicion the funds could violate U.S. law, said it doesn’t comment on specific account holders, but as WSJ notes, this financial threat isn’t theoretical:
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Israel Bombs Weapons Depot Run By Iranian Militia
Israel Bombs Weapons Depot Run By Iranian Militia
Tensions continued to climb in the Middle East Thursday evening as reports of another air strike have been confirmed, but this time, it was the Israelis doing the shelling.
According to reports by domestic and western media, the Israeli air force carried out an attack against an Iran-backed militia reportedly headquartered on the border between Syria and Iraq.
Tribal sources in Iraq apparently told reporters that the Israeli shelling targeted trucks and individuals associated with Iranian-backed militias near the Iraqi-Syria border. Artillery and shelling was also reported, though it’s unclear who fired those shots. The weapons are believed to have been destined for Hezbollah.
Sources claimed that the airstrikes were targeting weapons shipments, according to the Washington Post. The Kataib Imam Ali, an Iran-backed militia, was apparently moving weapons, possibly in preparation for a strike against US interests.
Al Mayadeen reported that the strikes targeted ballistic missile warehouses run by the group. The warehouse was situated outside of the city of Al Bukamal
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