Brent oil reaches highest price in over a year

ERBIL, Kurdistan Region — The price of Brent crude oil hit $65 per barrel on Thursday, the highest it has been for over a year, amid the COVID-19 vaccination drive, which analysts have said may be good news for Iraq’s economy. 

The price of one barrel of Brent crude oil hit $65 on Thursday morning; the highest since January 2020, where the price of one barrel stood at $66 on January 10.

A barrel of Brent oil sold for less than $20 a barrel in April 2020 as a result of a price war between major oil producers Russia and Saudi Arabia, and a crash in global demand for oil amid the coronavirus pandemic. Prices struggled to bounce back for most of 2020 as the pandemic persisted.

With the start of the vaccination process in many developed countries, the price of oil has risen – good news for Iraq, which is highly reliant on oil exports to fund its economy.  

“Prices are expected to increase even further and hit even $65, since many countries have started vaccinating their citizens and demand is once again increasing,” Erbil-based oil and gas analyst Arshad Taha told Rudaw English on Saturday.

“Even if Iraq does not start vaccinating – as long as oil-demanding countries do so, Iraq will be in a good economic situation and fill the deficit in its budget,” Taha added.

Like some other oil producers, Iraq was hit hard by production cuts as per an Organization of Petroleum Exporting Countries (OPEC+) agreement in April.

Countries like Iraq and Russia, who had previously overproduced oil, had to make extra cuts in their production in the months following the April agreement. 

In order to make up for excess production, Iraq pledged in September that it would cut an extra 400,000 barrels per day, on top of the 850,000 already designated by OPEC+.

Iraq has produced 88,922,697 barrels of oil in January, with an average price of $53.586 per barrel, according to data released by the oil ministry on Thursday.