Iraqi parliament votes on $56 per barrel of oil in approved 2015 budget law draft

The Iraqi parliament approved the proposed 2015 budget law draft of IQD119 trillion (around $100 billion) late on Thursday. The session also included a vote on the price of a barrel of oil in the budget, resulting in a decision by parliament on $56 per barrel for the current year. The 2015 budget law draft revealed a deficit of IQD25 trillion ($21 billion).

As former Prime-Minister Nouri Al Maliki’s government at the time failed to pass a 2014 budget due to antagonism between the Kurdistan Regional Government (KRG) and Baghdad, the decision on the 2015 budget is interpreted as a gesture of good faith of both parties.

The approval follows a thaw in KRG-Iraqi relations since a deal on oil exports was reached in December 2014. However, this agreement does not cover cargoes already at sea, such as the crude aboard the much talked-about oil tanker United Kalavryta. Greek vessel operator Marine Management Services reported on Thursday that the Suezmax tanker had left the coast of Texas and was en route to Gibraltar.

The United Kalavryta had been anchored off the coastal city of Galveston since July, having been trapped in legal limbo as the Iraqi federal government considered the shipment “stolen property.” A lawsuit filed by Iraq at the time prompted the unknown US buyer reject the shipment. Subject to seizure, the cargo remained aboard the United Kalavryta as the vessel was anchored just outside of Texan state waters.

The passing of the proposed 2015 budget could open the door to potential buyers, which are likely to benefit from the eroded value of the cargo. Originally estimated to be worth around $100 million, the accrued freight time costs alone will reduce that figure by at least $8 million.