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Iraq Strikes $2 Billion Prepayment Crude Oil Supply Deal With China's Zhenhua
Iraq's SOMO signed a deal with China’s ZhenHua to supply 130,000 crude oil barrels per day, upto 4 million barrels worth $2 bn with an upfront annual payment.
Iraq on January 2 struck a multibillion-dollar oil-supply deal with a Chinese firm after Iraqi Prime Minister Mustafa al-Kadhimi approved the rare contract in the Iraqi parliament. China’s ZhenHua Oil Company finalized a deal with Iraq’s State Oil Marketing Organization (SOMO) for the monthly purchase of 4 million oil barrels worth $2 billion in a 5-year annual contract. The Iraq-China crude supply deal will bolster Iraq’s economy which is in shambles due to the coronavirus pandemic. Iraq is the latest with the prepayment settlement among the Chinese state-owned trading companies that struck similar deals with Angola, Venezuela, and Ecuador, previously to rescue the cash strapped economies.