Iraq has experienced two consecutive annis horribiles and there are strong reasons to think that 2016 could plumb fresh depths, ranging from political rivalry in Baghdad, Kurdish institutional limbo and interventions from foreign states.

Parliament’s approval of the 2016 budget on 16 December was an achievement of sorts, but its headline assumptions were highly unrealistic (MEES, 18 December). Assumed revenues of $71.9bn and projected spending of $93.2bn, with a resultant deficit of over $21.3bn appear wildly optimistic, given the assumed oil price of $45/B. MEES estimates Iraq’s Basrah Light was fetching just $28.3/B when the budget was approved, and prices have slipped further since. It will likely sell for around $30/B through at least part of 2016. (CONTINUED - 1141 WORDS)