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Iraq wants to fight the Islamic State. It must fight falling oil prices first

Iraq’s leaders are tying themselves in knots trying to save themselves from the pain of plunging oil prices while crafting a budget that can meet the country’s most pressing needs with shrunken revenues. One of the biggest questions is whether the smaller budget will handicap Iraq’s ability to launch the long-awaited spring offensive against the […]

Keith Johnson writes for Foreign Policy:

Iraq’s leaders are tying themselves in knots trying to save themselves from the pain of plunging oil prices while crafting a budget that can meet the country’s most pressing needs with shrunken revenues. One of the biggest questions is whether the smaller budget will handicap Iraq’s ability to launch the long-awaited spring offensive against the Islamic State.

Since last summer, crude prices have fallen about 60 percent, trading around $50 a barrel in London on Wednesday, Jan. 28. That’s bad news for plenty of oil exporters around the world — Venezuela and Russia are wheezing, in particular — but the fiscal squeeze is hammering Iraq right as it tries to rebuild its shattered army to do battle with the Islamic State. The United States hopes that the shattered Iraqi military can be rebuilt enough that it will be capable of waging a successful ground battle against the terrorist group, which has taken over chunks of Iraq’s north and west.