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6 days ago
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Superpower Struggle Puts Iraqi Kurdistan's Oil Autonomy at Risk
It has been over two years since the Baghdad-based Federal Government of Iraq (FGI) placed an embargo on independent oil exports from the Erbil-based Kurdistan Region of Iraq (KRI). The legal basis for the halting of these essential flows to the finances of the semi-autonomous region of Kurdistan was the International Chamber of Commerce's (ICC) order that they would not be resumed until Turkey paid the FGI the US$1.5 billion in damages for these allegedly unauthorised oil exports over many previous years. That said, the real reason why the FGI moved to stop the KRI's independent oil sales is simply that it wants to remove any independent status from the region and roll it into the rest of Iraq as just another province like any other. Baghdad has correctly identified the best way of doing this as cutting off the KRI's key source of revenue through which it finances its semi-autonomous status – revenues from independent oil sales. Early in his new office, Iraq's Prime Minister Mohammed Al-Sudani carefully laid out this as being Baghdad's plan when he introduced the new Unified Oil Law being drafted at the time. He said that it would be run in every respect out of Baghdad, that it will govern all oil and gas production and investments in both Iraq and its semi-autonomous Kurdistan region, and that it will constitute 'a strong factor for Iraq's unity'.Unsurprisingly, the great global powers have their own views on whether the KRI should lose its semi-independent status and be subsumed into a greater Iraq. To begin with, both the U.S. and its allies, and China and its allies, know that Iraq as a whole is full of oil (and associated gas). The FGI side officially holds a very conservatively-estimated 145 billion barrels of proved crude oil reserves (nearly 18% of the Middle East's total, and the fifth biggest on the planet), according to the Energy Information Administration. Unofficially, it is extremely likely that it holds much more oil than this. In October 2010, Iraq's Oil Ministry increased its own official figure for the country's proven reserves but at the same time stated that Iraq's undiscovered resources amounted to around 215 billion barrels, as analysed in full in my latest book on the new global oil market order. This was also a figure that had been arrived at in a 1997 detailed study by the respected independent oil and gas firm Petrolog. However, even this did not include the KRI's actual and potential oil reserves. As the International Energy Agency highlighted at the time, before the relatively recent rise of exploration activity in the semi-autonomous region, more than half of the exploratory wells had been drilled prior to 1962 -- a time when technical limits and a low oil price gave a much tighter definition of a commercially successful well than would be the case today. Based on the previous limited exploration and development of oil fields in the KRI area, the proven oil reserves figure was first put at around 4 billion barrels. This was subsequently upgraded by the KRG to around 45 billion barrels but, again, this may well be a very conservative estimate of the oil resources there. Additionally important to both sets of superpowers is Iraq's geographical and geopolitical importance, located as it is in the heart of the world's greatest hydrocarbons region. In the former's case it is a key link in the land bridge from the Asia-Pacific region into Europe and in the case of the latter it is a core part of the Shia Crescent of Power dominated by Iran as a counterpoint to the Sunni style of Islam championed by Saudi Arabia. Given these factors, the stakes for both the West and the East in winning the most influence in the country – north, south or combined – are exceptionally high. To put it plainly: the U.S. and its key allies want the KRI to terminate all links with Chinese, Russian and Iranian companies connected to the Islamic Revolutionary Guards Corps over the long term, a senior source who works closely with the European Union's (E.U.) energy security complex exclusively told recently. 'This could then be used as a bridgehead to reassert the West's influence in the rest of Iraq through big investment deals firstly, and then related infrastructure developments,' he added. The most notable such deal in the south of Iraq so far is TotalEnergies' US$27 billion four-pronged deal, including the cornerstone Common Seawater Supply Project, analysed fully in my latest book. In the north, BP's US$25 billion deal across five major oil fields is similarly strategically vital for the West's future plans. The U.S. and Israel also have a further strategic interest in utilising the Kurdistan Region as a base for ongoing monitoring operations against Iran, according to the E.U. source. On the other side of the equation, China and Russia have long been behind the idea of subsuming the KRI into the wider Iraq. As a senior political source in Moscow exclusively told many months ago: 'Iraq will be one unified country and by keeping the West out of energy deals there, the end of Western hegemony in the Middle East will become the decisive chapter in the West's final demise.' Legally speaking, Iraq's 2005 Constitution cannot settle the matter of whether the KRI or FGI has the predominant rights over revenues from oil drilled in the KRI's area. According to the KRG, it has authority under Articles 112 and 115 to manage oil and gas in the Kurdistan Region extracted from fields that were not in production in 2005 -- the year that the Constitution was adopted by referendum. In addition, the KRG maintains that Article 115 states: 'All powers not stipulated in the exclusive powers of the federal government belong to the authorities of the regions and governorates that are not organised in a region.' As such, the KRG maintains that, as relevant powers are not otherwise stipulated in the Constitution, it has the authority to sell and receive revenue from its oil and gas exports. Additionally, it argues the Constitution provides that, should a dispute arise, priority shall be given to the law of the regions and governorates. However, the FGI maintains that under Article 111, oil and gas are under the ownership of all the people of Iraq in all the regions and governorates, which means they should be controlled by the FGI via the State Organization for Marketing of Oil. Consequently, given the lack of legal clarity on the issue, the KRI's future looks set to be determined by a straight superpower brawl. China would seem currently to have the advantage in terms of land and resources held. More than a third of all Iraq's proven oil and gas reserves and over two-thirds of its current production are managed by Chinese companies, according to industry figures. In hard numbers, Chinese companies combined have direct shares in around 24 billion barrels of reserves and are responsible for production of around 3.0 million barrels per day (bpd). Additionally, it has developed a spider's web of influence through multiple infrastructure projects that run adjunct to its oil and gas developments, as also detailed fully in my latest book. That said, the U.S. and its allies appear to be picking up the pace on building out their presence across Iraq, too, in line with the aforementioned plan to do so. In addition to the potentially game-changing projects of TotalEnergies and BP, May 19 saw two deals signed by U.S. firms HKN Energy, and WesternZagros, to develop two fields – the Miran gas field and the Topkhana oil and gas field -- in the KRI area. U.S. Energy Secretary Chris Wright was also very clear about the deeper intention behind these deals, saying that they align with the administration's broader strategy of striking commercial deals with allies to counter Iran's influence. By extension, given the extremely strong links between Tehran and Beijing and Moscow, this also means countering China's and Russia's influence across Iraq as well. By Simon Watkins for More Top Reads From this article on
Morocco World
12-05-2025
- Business
- Morocco World
US, China Agree to Slash Tariffs, Pause Trade War for 90 Days
Doha – The United States and China reached an agreement Monday to significantly reduce tariffs on each other's goods for 90 days, marking a major de-escalation in their trade war. US Treasury Secretary Scott Bessent announced the deal after weekend negotiations in Geneva, Switzerland. Under the agreement, the US will cut its tariff on Chinese imports from 145% to 30%, while China will reduce its duties on American goods from 125% to 10%. The pause takes effect Wednesday, May 14. 'We have reached an agreement on a 90-day pause,' Bessent told reporters. 'The consensus from both delegations is that neither side wanted a decoupling.' The breakthrough comes after both sides held trade talks in Geneva over the weekend, where officials established 'a mechanism to continue discussions about economic and trade relations.' Bessent will represent the US in future negotiations, while Vice Premier He Lifeng will represent China. Markets responded positively to the news. Hong Kong's Hang Seng index rose sharply by 3.4%, while the UK's FTSE 100 gained 0.7%. Oil prices also increased, with Brent Crude up by 2.8%. US stock futures surged as well, with contracts tied to the Nasdaq expected to rise by 3.3%. The International Chamber of Commerce called for a clear roadmap for future negotiations under the newly established economic consultation mechanism. The agreement maintains a 20% component of the US tariff aimed at pressing Beijing to address the fentanyl crisis. Bessent said he was 'positively surprised by the willingness of China to deal with the problem' and noted that Chinese officials 'understood the magnitude' of the fentanyl crisis in the US. China's commerce ministry confirmed the suspension of 'all tariff countermeasures' taken against the US since April 2. In a statement, the ministry said the move 'meets the expectations of producers and consumers in both countries' and expressed hope that the US would 'continue to work with China' on trade issues. The tariff reduction comes at a critical time for both economies. Major US retailers previously warned of empty shelves as importers paused shipments due to prohibitively high taxes. Chinese factories experienced a sharp decline in export orders, adding pressure to their already sluggish economy. While the agreement signals progress, some analysts urge caution in regards to its long-term implications. The deal represents a temporary breakthrough but doesn't resolve the fundamental tensions between the world's two largest economies. The 90-day timeframe gives both sides an opportunity to address longer-standing issues. These include intellectual property protections, forced technology transfers, and allegations of government subsidies that create unfair advantages. These complex differences have developed over many years and likely cannot be fully resolved by August, though substantial progress would help ease tensions between Washington and Beijing. The deal marks the second major trade announcement by the US in the past week, following an agreement reached with the UK on Thursday, demonstrating the Trump administration's willingness to negotiate on tariffs. Read also: Business as Usual: Morocco Navigates a World in Tariff Tumult Tags: China tariffsTrump new tariffsUS China
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First Post
09-05-2025
- Business
- First Post
Trump, Starmer formally confirm US-UK trade deal to avert the horrors of tariffs
In a choreographed phone call, US President Donald Trump and UK Prime Minister Keir Starmer formally announced the 'breakthrough' trade deal between the two nations that will now help Britain to avert the Trump tariffs read more The United States and the United Kingdom have formally confirmed the 'breakthrough' trade deal between the two nations, slashing the major impact of US President Donald Trump's Tariffs on the British economy. UK Prime Minister Keir Starmer said it was a 'fantastic, historic day' as he announced the agreement, the first by the White House since Trump announced sweeping global tariffs last month. While addressing the workers at the Jaguar Land Rover plant in Solihull, Starmer said that the agreement had saved jobs in the car and steel industries, which were under threat by the Trump tariffs. However, critics in the country argued that the trade deal between the two nations had failed to address many of the high tariffs that remain in place. STORY CONTINUES BELOW THIS AD 'The reality is that US tariffs on UK exports remain significantly higher than they were at the start of the year," John Denton, secretary general of the International Chamber of Commerce, told The Guardian. It was still unclear what would happen to industries not explicitly covered by the deal, such as pharmaceuticals. 'Preferential treatment,' but is it enough? As per the deal, the US has agreed to cut the 25 per cent tariff rate on British steel and aluminium exports to zero. The concession is being seen as a sign of relief for the British steel industry, which was on the verge of collapse. Apart from this, American tariffs on up to 100,000 British cars will also be reduced to 10 per cent, down from the 27.5 per cent rate Trump initially announced. It is pertinent to note that the United States is the main export market for British cars. Meanwhile, Washington has also pledged to give 'preferential treatment' to the UK's pharmaceutical industry, which Trump has threatened with tariffs, although none have been set yet. 'I know people along the way were urging me to walk away, to descend into a different kind of relationship. We didn't,' the British prime minister replied to his critic. 'We did the hard yards. We stayed in the room. I'm pleased to say to the workforce here and through them to the country, how important I think this deal is," he added, concluding his remarks with the slogan, 'Jobs won, not jobs done'. Peter Mandelson, the UK's ambassador to the US, said a 'technology partnership' would be negotiated 'over the coming months'. US Vice President JD Vance is expected to play a key role in that regard. The phone call The formal announcement of the deal was made in a choreographed phone call between Starmer and Trump, while the press gathered with the leaders on either end of the line. However, the deal is not free from criticism. Kemi Badenoch, the Conservative leader, criticised the deal, claiming that the UK has been 'shafted' by Trump. 'When Labour negotiates, Britain loses. We cut our tariffs – America tripled theirs. Keir Starmer called this 'historic.' It's not historic, we've just been shafted!' However, Andrew Griffith, the shadow trade secretary, said the reduction in tariffs would 'be welcomed by exporting businesses". A trade group representing Detroit automakers also criticised the deal, claiming it unfairly penalises American automakers who have partnered with Canada and Mexico. In a sharply worded statement, the American Automotive Policy Council (AAPC) said its members – including Ford, General Motors and Jeep-maker Stellantis – faced import tariffs of 25 per cent on cars assembled in Canada and Mexico. STORY CONTINUES BELOW THIS AD 'We are disappointed that the administration prioritised the UK ahead of our North American partners,' Blunt said. 'Under this deal, it will now be cheaper to import a UK vehicle with very little US content than a USMCA-compliant vehicle from Mexico or Canada that is half American parts," he added. Meanwhile, Starmer insisted that he has 'not at all' been bounced into the deal but 'didn't know the exact day' it would be completed. 'I wouldn't be having my phone call with President Trump halfway through the second half of the Arsenal v PSG game had I planned it better. That's the way it turned out, and that's the discussion we were having late last night about how we proceeded with this deal,' he said.
Qatar Tribune
07-05-2025
- Business
- Qatar Tribune
Qatar Trade and Treasury Summit kicks off in Doha
Tribune News Network Doha The Qatar Trade and Treasury Transformation Summit 2025, organised by Qatar Chamber and the International Chamber of Commerce Qatar (ICC Qatar), and co-organised by MERGE Events, will kick off today, at the InterContinental Doha, Qatar Chamber announced in a statement. The summit is held under the patronage of Minister of Commerce and Industry HE Sheikh Faisal bin Thani bin Faisal Al Thani, alongside Sheikh Khalifa bin Jassim Al Thani, Chairman of Qatar Chamber. According to the statement, the summit brings together a distinguished line-up of international experts and speakers to explore the latest trends and insights into the trade and treasury sectors. Held for the first time in Qatar, the summit will focus on digital transformation in banking operations and its role in enhancing corporate treasury capabilities through innovative and intelligent cash and payment solutions. The event aims to foster innovation and accelerate digital development in Qatar, serving as a strategic platform to examine the latest developments in trade finance, treasury, and payment practices. It will feature seven panel discussions and a closing session, covering key topics such as the expansion of Qatar's trade capabilities, anti-money laundering measures, the future of trade finance, treasury management transformation, and innovations in cross-border payments.
Gulf Today
03-04-2025
- Business
- Gulf Today
Trump's tariff formula confounds the world, punishes the poor
Ridiculed for imposing trade tariffs on frozen islands largely inhabited by penguins, Donald Trump's formula for calculating those levies has a serious side: it is also hitting some of the world's poorest nations hardest. The math is simple: take the US goods trade deficit with a country, divide it by that country's exports to the U.S. and turn it into a percentage figure; then cut that figure in half to produce the US "reciprocal" tariff, with a floor of 10%. That's how the volcanic Australian territory of Heard Island and McDonald Islands in the Antarctic ended up with a 10% tariff. The penguins got off lightly, you might say. But Madagascar — one of the poorest nations in the world with gross domestic product (GDP) per head of just over $500 — meanwhile faces a 47% tariff on the modest $733 million of exports of vanilla, metals and apparel that it did with the US last year. "Presumably no one is buying Teslas there," John Denton, head of the International Chamber of Commerce (ICC), told Reuters, an ironic reference to the improbability of Madagascar being able to placate Trump by buying upmarket US products. Sam Rasson, left, owner of Elegant Interior Fabrics, talks to a customer in the fashion district in Los Angeles on Thursday. AP Madagascar is not alone: the bluntness of the formula as applied to economies which cannot afford to import much from the US inevitably leads to a high reciprocal tally: 50% for Lesotho in Southern Africa, 49% for Cambodia in Southeast Asia. "The biggest losers are Africa and Southeast Asia," said Denton, adding the move "risks further damaging the development prospects of countries already facing worsening terms of trade." RICH NATIONS ALSO STUNG But the formula is also sowing confusion among rich countries. For the European Union it has produced a punitive tariff of 20% - four times the 5% which the World Trade Organization calculates as the EU's average tariff rate. "So, at least for us, it is a colossal inaccuracy," said Stefano Berni, General Manager of the consortium representing makers of the Grana Padano speciality cheese in Italy. "It costs us three times as much today to enter the US as it does for US cheeses to enter our market," he said in a statement. Asked about its methodology, White House Deputy Press Secretary Kush Desai posted on X that "we literally calculated tariff and non-tariff barriers" and included a screenshot of a White House paper setting out the algebra behind the formula. Asked on CNBC how the Trump administration came up with the formula, Commerce Secretary Howard Lutnick did not directly explain it but said United States Trade Representative (USTR) economists had worked for years on a metric that reflected all trade barriers set up by a given country. But economists across the world rushed to point out that the terms cancelled each other out in such a way that it could be reduced to a simple quotient of goods trade deficit over goods trade exports. "There is really no methodology there," said Mary Lovely, Senior Fellow at the Peterson Institute. "It is like finding you have cancer and finding the medication is based on your weight divided by your age. The word 'reciprocal' is deeply misleading." Robert Kahn, managing director, global macro for Eurasia Group consultancy, agreed that it produced "a lot of these kind of nonsense numbers that aren't material." "It sends a signal ... that we are pulling back from our relationships and alliances with them and is a cold shower to a lot of our traditional allies," he told Reuters. Others noted that it also raised questions over the widely held view that Trump is launching an opening gambit in what will be one-on-one discussions with individual countries that will ultimately see the new US tariffs sharply reduced. "The US has chosen a methodology that is essentially mechanical," said Stephen Adams, a former European trade adviser who now works for Global Counsel consultancy. "One practical question it does raise is whether there's any scope to negotiate this away ... The US hasn't identified any specific measures that might be changed in order to convince the president to change his mind." Reuters
