Market turmoil hits IS-captive Iraq

Spending constraints thanks to low oil prices and military expenditure are frustrating the federal government and the KRG

Under different circumstances the authorities in Baghdad and those in Erbil, the seat of the Kurdish Regional Government (KRG), would be sitting back to enjoy a golden year in 2016.  Each is implementing ambitious plans to expand crude oil production and exports. Whether coordinated or developed separately these policies were designed to reinforce Iraq’s position as Opec’s second-largest producer behind Saudi Arabia and prepare it to defend the spot from an expected output hike from post-sanctions Iran.  Instead, both governments, amid worsening oil-price weakness and the ongoing military efforts to defeat IS, will struggle to meet the capex demands of their energy sectors. While both will s