Sino-MENA: China doubles down in Iraq
The Iraqi government has taken a crude supply prepayment from China, in a deal where oil is effectively being used as security for a loan, for the first time in the MENA region. This week we examine how new Sino-MENA investments have been unfolding in recent months, particularly focusing on Sino-Iraqi energy ties. We assess:
- The latest oil transaction between China and Iraq, which lays the foundation for future deals that extend beyond the traditional energy sector.
- China's robust economic recovery in comparison with its global counterparts, as the country is expected to continue to take advantage of oil suppliers' price cuts and draw in more crude oil inventories amid the ongoing pandemic.
- Whether China will continue to purchase at the levels seen last year, given that oil prices are gradually rebounding, and with the likelihood that China's petroleum reserve is nearing capacity.
Florence Eid-Oakden, Ph.D, Chief Economist
Ghalia Al Bajali, Norah Song, Analysts
The Regional Views series are thematic papers aimed at identifying and analysing factors behind medium to long-term economic trends shaping the region. Our analysis draws conclusions that help businesses and investors get ahead of the curve. As a firm staffed by Middle Easterners, we focus on insight rather than standard analysis.
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