Falling Oil Prices May Hurt Fight against ISIL – Abadi

Iraqi Prime Minister Haidar al-Abadi told reporters in London on Thursday that the falling oil prices were imperiling the Iraqi government’s efforts to fight the Islamic State. Abadi made the comments after meeting with the representatives of 20 countries who were gathered in the UK to unify international community’s response to ISIL. 

Baghdad generates around 85 percent of its hard-currency revenues through oil sales. Oil has lost more than half its value since last summer.

“This has been disastrous for us,” Abadi said. “I cannot stress this any more, and we explained this to our partners in the coalition, and I think there will be a program to stand with Iraq.” (Dow Jones Newswires, 23 January)

The reference to a program to stand with Iraq probably signifies the readiness of the coalition to provide higher levels of financial aid to Baghdad to overcome the shortages in oil revenues.

“We don’t want to see a reverse of our military victory due to our budget and fiscal problems, and we have been assured that every member of this coalition will stand with Iraq,” Abadi said.

A senior U.S. official who met with Abadi in London said, “Despite Iraq hitting a record number of oil exports in recent months, the price of oil is impacting their ability and their resource base. It’s not at the level that we anticipated 100 days ago when we were thinking through where we’d be.”

Secretary of State John Kerry said on Thursday that the international coalition set up to fight ISIL has reclaimed 700 square kilometers of territory from the Islamic State and half the insurgency’s top command had been “eliminated.” Baghdad and Washington are also devising an economic strategy that will allow the Iraqi government to develop areas that have been reclaimed once they’re liberated. (Dow Jones Newswires, 23 January)