Page 8 - MEOG Week 06 2023

MEOG POLICY & SECURITY MEOG

Russia’s Lavrov in Baghdad to

discuss oil company payments

IRAQ RUSSIAN Foreign Minister Sergey Lavrov was Washington this week. He said the goal is to pro-
in Baghdad this week to focus on how the latter tect Iraqi banks and the central bank from sanc-
might pay Russian companies working in Iraq tions. “There are sanctions in place that should
while avoiding US sanctions. The two countries not be imposed on the Iraqi side because the
considered what alternative currencies might be co-operation with Russian companies is contin-
used instead of the US dollar. uing and there are active Russian companies in
Discussions with Iraqi Foreign Minister Fuad Iraq,” he said.
Hussein also covered energy and food security The US Federal Reserve in late 2022 imposed
in light of the international sanctions levelled tight regulations on international dollar trans-
against Russia for its invasion of Ukraine a year actions by Iraqi banks, an issue to be discussed
ago. in Washington. The steps taken by the Federal
The ensuing war has brought not only sanc- Reserve are reported to have blocked nearly
tions upon Russia and those doing business with 80% of Iraqi dollar transfers outside its borders.
it, but energy prices have soared and countries According to the US, the measures were neces-
like Iraq that look to Russia as a source of food sary to make Baghdad comply with sanctions in
have faced food insecurity. force against a number of countries, particularly
A large number of Russian oil and gas execu- Iran.
tives accompanied Lavrov to Iraq, where Russia Since the steps taken by the Federal Reserve,
has a lengthy oil industry and political history. the value of the Iraqi dinar has declined and
Iraq’s oil reserves are some of the biggest in the Baghdad is said to be looking into using another
world and Russian companies like Rosneft, currency to conduct international transactions,
Lukoil, Bashneft and GazpromNeft have been such as the Chinese yuan or Emirati dirham.
involved in developing those resources for dec- “In the current conditions of United States
ades. It is estimated that Russian interests have currency restrictions upon our two countries, it
in excess of $10bn invested in the Iraqi oil and is important to protect legitimate economic rela-
gas sectors. tions from pressure from the West by switching
Iraq is in a situation where it owes large to paying for oil supplies in the currencies of
amounts of money to Russia, but risks running other reliable countries,” Lavrov said.
foul of sanctions if payments are made in dollars Meanwhile, Iraqi oil production during the
or euros. month of January declined by 100,000 barrels
“There is a vital role for the Russian oil com- per day to 4.331mn bpd, according to the State
panies in investing and working in the oil and gas Organization for Marketing Oil (SOMO). The
sector,” Hussein was quoted by Reuters as saying. marketing firm said bad weather at its Basrah oil
“These companies have dues and we discussed terminal had restricted loading operations. Iraqi
how to deal with them.” crude exports for January totalled 3.624mn bpd,
Fuad added that he would discuss with US including those from the Kurdistan Regional
officials how to pay the Russians when he visits Government (KRG)-controlled areas.™

P8 www. NEWSBASE .com Week 06 08•February•2023