22 February, 2016
By Ahmed Mousa Jiyad
Oil export by a country could be impacted by a multiplicity of factors, but in the short term oil export could be highly sensitive to and impact by political developments on the national, regional or international levels; PRIX Index is meant to measure just that.
The latest fifth issue of PRIX Index covering first quarter of 2016 indicates that global index is very close to a threshold of “No change” in global net export of oil; an indication that supply glut, though still with us, it might be on the way of receding during this year for possible ending of supply glut and accordingly approaching oil price floor.
Recent news and movements within OPEC and from other producers are signaling on that direction.
In the meantime, Iraq PRIX index for the same quarter has moved upward and this could be, but definitely not for sure, interpreted to mean that the increase in Iraqi oil export has no impact on global oil supply as such increase might be smoothed/counterbalanced by either “no change” or “decline” or a combination of both by the remaining countries that are covered by PRIX Index.
But formal statements revealed Iraq’s willingness to join in oil production cut in an effort to prevent further oil price deterioration and hopefully reverse it upward.
This brief article begins by introducing a relatively recent political risk index-PRIX; then assessing PRIX applicability to Iraq and also provides comparison with the global PRIX index; that was followed by an attempt to extrapolate the situation for the second quarter this year and finally highlights the main advantages of the Index.
Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya@online.no, Skype ID: Ahmed Mousa Jiyad).