Iraq crisis will ease Bahrain's debt, MP says

Concerns over disruption in supply driving up some international benchmarks to as high as $115 a barrel
Bahrain Shura Council and House of Representatives in Manama. (MOHAMMED AL-SHAIKH/AFP/Getty Images)
By Beatrice Thomas
Sun 22 Jun 2014 04:22 PM

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.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.