Concerns over disruption in supply driving up some international benchmarks to as high as $115 a barrel
A Bahraini MP has predicted an economic boon on the back of Iraq crisis as high oil prices help drive down the country’s national debt, it was reported.
Crude oil prices have been on the increase in recent weeks, with concerns over disruption in supply driving up some international benchmarks to as high as $115 a barrel, Gulf Daily News reported.
Last week militants from the Islamic State of Iraq and the Levant (ISIL) forced the closure of Iraq's largest oil refinery at Baiji.
While all of Baiji's estimated output capacity of 320,000 barrels a day - a quarter of Iraq's refining capacity - has until now been used domestically, a prolonged shutdown could force the country to start importing oil and cut into global supplies.
Bahrain Shura Council financial and economic affairs committee chairman Khalid Al Maskati told the GDN the immediate effect of inflated crude prices, which are hovering near 52-week highs, would be beneficial to Bahrain as its current budget was calculated under the assumption that the relative price of oil was $80 a barrel.
He said surplus cash-per-barrel could, therefore, be used to drive down the national debt before it reached an “unsustainable” 60 percent, he told the GDN.
“What we need to do is find a mechanism or a solution to utilise the extra money to lower the national debt,” he said.