Trump’s oil gamble fails, Iraq’s budget fuels corruption
Shafaq News/ On Saturday, oil expert Hamza Al-Jawahiri criticized US President Donald Trump’s efforts to manipulate global oil prices, predicting their failure.
Speaking to Shafaq News, Al-Jawahiri argued that Trump’s strategy to lower oil prices was politically driven, aimed at influencing global events such as the war in Ukraine and political shifts in Gaza, Lebanon, and Syria.
He highlighted the short-term benefits for industrialized nations, noting that “while low oil prices might boost economic growth initially, the resulting surge in demand would likely push prices above $80 per barrel within months.”
Al-Jawahiri also warned of the risks to the US, describing Trump’s program of expanding domestic production while pressuring Saudi Arabia to increase output as “unsustainable.”
“This strategy creates instability and could lead to long-term strategic losses for the United States,” he said.
Shifting the focus to Iraq, Al-Jawahiri criticized the inflated budget, which he said “facilitates the misappropriation of public funds.”
“Iraq does not require such an enormous budget. The exaggerated figures are crafted to enable corruption,” he asserted.
He pointed to Iraq’s economic resilience during past crises, emphasizing that “in 2014, when oil prices dropped to $40 per barrel, the country managed to pay salaries without resorting to borrowing.”
Al-Jawahiri urged the government to adopt fiscal discipline by cutting unnecessary borrowing and aligning spending with actual oil revenues.
Notably, throughout his presidency, Trump persistently advocated for lowering global oil prices to reduce energy costs, stimulate US economic growth, and strengthen domestic energy production. He often pressured major oil producers like Saudi Arabia and OPEC to boost output, framing this as a way to stabilize markets and benefit consumers.
Trump also used oil prices as a geopolitical tool, particularly to weaken Russia during the war in Ukraine by reducing its oil revenue streams. While his initiatives led to temporary price declines, analysts and producers have questioned their long-term viability, given the market's volatility and the emphasis by many producers on maintaining long-term stability over short-term price reductions.
Meanwhile, Iraq’s reliance on oil, which makes up 90% of state revenues, leaves the economy highly vulnerable to global price fluctuations. The 2024 budget, totaling 211 trillion dinars ($161 billion), includes a substantial deficit of 64 trillion dinars, primarily allocated to salaries and pensions.
Moreover, corruption continues to undermine Iraq’s financial system. A fuel oil smuggling network reportedly generates over $1 billion annually for external actors by exploiting subsidized government fuel.
