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OPEC is in negotiations with its members to find the best way forward, but talks appear to have stalled over one laggard, Iraq, which has failed to live up to its agreement under the cartels production cut deal. Does this give OPEC cover for meeting delays and overall noncompliance, or is it a sincere effort to get it onboard?

Whether Iraq can be brought in line and fully comply with its share of the OPEC deal is certainly doubtful. Yet interestingly enough, OPEC and Russia have staked the extension of the dealy past June, when the current level of cuts expire and cuts begin to ease, entirely on whether all laggard members bring production down to agreed-upon levels.

Either OPEC and Russia are certain they can get Iraq to bring its production down to its quota, or they are content to have the cartels production above normal.

Russia and Saudi Arabia both agreed that the current level of production cuts should be extended at least one more month. The caveat? That all other countries implement their established quotas in full.

Thats a pretty big ask, and if history repeats itself, its impossible. What this means for oil prices is that there would be no extension, inventories wont draw down as quickly, and oil prices will remain depressed along with demand for crude--which although it is picking back up thanks to lockdowns being lifted, is still about 20 million barrel per day under what it was before the pandemic.

Iraq isnt the only laggard, to be fair. Nigeria, Angola, and Kazakhstan are also not keeping up their end of the bargain. The cartel went to work trying to get the three, and Iraq, to recommit to the cuts, and with the exception of Iraq, all three gave the requisite assurances. Related: Are Investors Ignoring The Largest Financial Risk Ever?

Of course, that doesnt mean they will necessarily do so, but its at least a start.

Iraq, however, has not committed to bringing its production down to the quota in June.

OPECs compliance for May is thought to be about 89%. This isnt terrible considering the volume of how much is being cut. Still, compliant Saudi Arabia is declaring its unwillingness to continue its share of the cuts for another month unless the laggards get their act together. Laggards that include Iraq, whose compliance reached only about 42% in May.

OPEC wont even have the meeting this week unless Iraq agrees to improve its compliance.

Is it all just a ploy to manage market expectations in the run up to the meeting to ensure that whatever agreement is hatched is looked upon favorably, therefore maximizing the price impact? Is it a strategy to get out of extending the deal, perhaps as discussed with U.S. President Donald Trump? Is it designed to put maximum pressure on Iraq to comply?

Chances are, well never know. But one thing is for certain: Iraq will not comply with the deal--period.

In fact, it said as much. Iraq said it would fully implement cuts by the end of July-in their promise-to-fulfill-later kind of way that they have done in the past.

Iraq the Laggard

For the most part, when it comes to chronic noncompliance, we are talking about the usual suspects of Iraq and Nigeria. But Iraq is so much bigger.

Both countries have unique challenges when it comes to sticking to any production cut deal that OPEC or OPEC+ could ever hatch. For Iraq, it is their reliance on international oil companies, most of which operate in the semi-autonomous Kurdistan region. So on one hand, Iraq doesnt want to bite the hand that feeds it--big foreign oil companies--and on the other, Iraq has a tough time trying to regulate what goes on in the Kurdistan region. This is not even to mention the rocky political climate in Iraq. Related: Can Yemens Oil Industry Make A Comeback?

For Nigeria, its the fact that it has a strong reliance on its oil revenues. Most OPEC nations rely on oil revenue for a substantial part of the revenue. But for Nigeria, shutting down oil production and forgoing the revenue associated with that oil production is tough. Yet Nigeria has agreed, although its May compliance was still not up to snuff.

OPECs Other Problem

Is OPEC really worried about the extra barrels Iraq is pumping? After all, Saudi Arabia has overachieved its own quota for well over a year while the laggards basked in their overproduction. Most signs point to legitimate worry. Saudi Arabia has declined to publish its July OSP for July until after the meeting. The Kingdom is also raising its customs duties on hundreds of products to generate more non-oil revenue. In a similar vein, its tripling its VAT and suspending its cost of living allowances. These are worrisome signs.

Whats most concerning in the market, however, is the notion that the OPEC deal could fall apart entirely.

The previous deal catastrophe is all too fresh in our minds after Russia and Saudi Arabia--the two heavyweights in the deal--failed to reach an agreement over the cuts. The deal failure triggered a price war between the two, plunging the world into a glut of oil and sending prices spiraling as demand fell in the wake of the pandemic.

By Julianne Geiger for Oilprice.com

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Did Iraq Just Doom The OPEC Deal - OilPrice.com

Iraqs new government hopes to open a new page with Arabian Gulf countries to attract capital inflows from the region, Finance Minister Ali Allawi said.

Their main objections to the projects they are shown in Iraq is the routine and deadly bureaucracy that prevents any successful investment, Mr Allawi told reporters in Baghdad on Sunday.

We promised to look at this issue in a very positive way and lift restrictions to create a streamlined investment environment in Iraq, he said.

The finance minister, who visited Saudi Arabia and Kuwait last month, said he avoided discussing Iraqs need for financing to plug a huge budget deficit expected this year.

He said he focused instead on building a long-term relationship, describing Arab Gulf business involvement in Iraq as negligible, except for some investments in the oil sector.

We want to create a kind of balance and integration between Iraq and the Gulf countries, which have a little role in the Iraqi economy, Mr Allawi said.

Hopefully we will open a new page with regard to Gulf businessmen and the economic issues, especially with Saudi Arabia and Kuwait.

Among the opportunities Mr Allawi said he mentioned to his counterparts in Saudi Arabia and Kuwait were their countries expertise in solar energy, which Iraq needs to tap, and a consumer market dominated by imports from Iran and Turkey.

We want to encourage them, but for them to enter in force the environment has to change, he said.

Mr Allawis visit to the two countries was the first official overseas trip by a member of Prime Minister Mustafa Al Kadhimis government.

Mr Al Kadhimi, a former intelligence chief supported by the United States, signalled upon taking office early in May that one of his priorities was to take relations between Iraq and its Arab Gulf neighbours out of the deep freeze.

The new prime ministers closeness to Washington has helped revive regional interest in Iraq.

Arabian Gulf nations had all but given up on Iraq in the past decade, seeing it as a failed state gravitating more and more towards the orbit of Iran despite the presence of American forces in the country.

Mr Allawi is the prime ministers main ally in the cabinet, which is divided by loyalties to different Shiite, Kurdish and Sunni groups.

The veteran academic and former investment banker has written and lectured on the social history of corruption in Iraq, as well as what he regards as errors by Washington in the aftermath of the US-led invasion that toppled Saddam Hussein in 2003.

He is a nephew of the late Iraqi politician Ahmad Chalabi, a mathematician who attracted Mr Allawi and other educated figures into the opposition to Saddam.

As a member of past governments, Mr Allawi steered away from the ideological rhetoric that marked many of his peers since the first democratic elections in the post-Saddam era consolidated the Shiite ascendency.

Accompanying Mr Allawi on his trip to Saudi Arabia was Salem Chalabi, a prominent Iraqi lawyer who is well connected in Saudi Arabia and the UAE. Mr Chalabi is also a nephew of Ahmad Chalabi.

Although the sharp drops in oil price and the coronavirus pandemic have hit economies across the region, Arabian Gulf Nations still possess sovereign wealth funds that could invest in mega-projects in Iraq, Mr Allawi said.

He said Iraq and the GCC could ultimately become a nucleus for a larger, single market.

Updated: June 8, 2020 06:29 PM

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Ali Allawi: Iraq must cut red tape to do business with Gulf - The National

Seyyed Hamid Hosseini said on Tuesdaythat Irans export of products to neighboring Iraq improved in the second Iranian month in the current year [from April 21 to May 19] as compared to a month earlier.

Accordingly, the countrys export of non-oil commodities, which had decreased due to the coronavirus pandemic, was compensated, he emphasized.

Turning to the latest situation of Irans export of non-oil goods to neighboring Iraq, Hosseini added, the latest statistics on foreign trade of the country indicate that export situation of the country in the second Iranian month in the current year has ameliorated as compared to its previous month.

Given the export situation, Iraq was placed at the second rank among other oil-exporting countries, Hosseini stressed.

He pointed to Iraqi borders shared with the Islamic Republic of Iran and added, Iraqis Arab borders with the Islamic Republic of Iran are reopening amid the pandemic by observing health protocols.

According to the latest data, 50 Iraqi trucks have entered Iran to load cargoes, kept at Irans Mehran Customs, to Iraq, he said, adding, with the coordination made, it is expected that 500 other trucks would enter into the country to transport other cargoes via Mehran Border to Iraqi land and territory.

Shalamcheh Border Crossing will be reopened soon as this border had been closed due to the outbreak of COVID-19.

With the coordination made, other Arab borders with the Islamic Republic of Iran will be reopened soon, Hosseini added.

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Irans export of products to Iraq ameliorated amid pandemic - Mehr News Agency - English Version

WASHINGTON Painted in bright yellow letters outside the White House are the words "DEFUND THE POLICE": a rallying cry for a movement to combat police brutality and racism that has exploded across the nation and caused nervousness among Democrats.

Protesters around the country demanding justice for George Floyd's death waved "Defund the Police!" signs at rallies in major cities on a weekend when Joe Biden officially became the presumptive Democratic nominee to face President Donald Trump in the fall.

As Trump seizes on the slogan to paint his opponents as radicals who envision a world of lawlessness and anarchy, Biden and most other Democrats are resisting the left's calls and floating more modest measures to curtail bad police behavior.

No, I don't support defunding the police," Biden told "CBS Evening News" on Monday. "I support conditioning federal aid to police based on whether or not they meet certain basic standards of decency and honorableness and, in fact, are able to demonstrate they can protect the community."

Johnetta Elzie, a civil rights activist and organizer, said Biden's calls for "reform" sound stale, mealy-mouthed and out of touch as "black people are still dying behind these antiquated ideas and policies."

"It's not enough. Joe Biden knows it's not enough. Joe Biden's team knows it's not enough. It's not at all answering the calls of the moment," Elzie said. "People have been saying to anyone who's f---ing up in this moment: Read the room. People are calling for defunding the police.

"People in power politicians and policymakers are still talking about reform. We're beyond that. We're over that," she said. "If they wanted reform, they would have done it six years ago when we actually had the chance to. But that's not what happened."

The clash pits an ideological movement aiming to transform the national debate against a Democratic electoral apparatus whose overriding goal is to defeat Trump. While activists say they believe the need for radical change is worth taking political risks, party leaders say they worry about alienating moderate white voters who sympathize with the protesters' cause but still support police.

"As somebody who's been through a great number of political wars, branding matters," former Sen. Claire McCaskill, D-Mo., said Monday on MSNBC. "My fear about the term 'defund the police' is it will be misused and abused by people who will want to scare people."

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Trump campaign spokesman Tim Murtaugh told reporters that the "defund the police" movement was "consuming" the Democratic Party and argued that Biden "does not have the strength to stand up to the extremists who are now calling the shots in the party."

And appearing on MSNBC, House Speaker Nancy Pelosi, D-Calif., sidestepped the issue, saying that police funding is "a local matter" and that her focus is to "change policy to make our policing more just."

She and other Democratic congressional leaders introduced a police overhaul package Monday that would outlaw chokeholds and "no knock" warrants, require body cameras and create a variety of mechanisms to punish bad officers.

Rashad Robinson, who leads the civil rights group Color of Change, said the Democratic legislation "has some work to do."

"It's important that we're actually seeing forward movement on policing," he said. "But there are a number of places from dealing with grand juries to all the ways in which police get so many different rules after they shoot someone and kill someone that have to be dealt with."

Minneapolis Mayor Jacob Frey, a Democrat, was loudly booed and forced to retreat from a gathering of demonstrators Saturday after he responded to a question about whether he would commit to defunding the police by saying, "I do not support the full abolition of the police."

When pressed to explain what the slogan means in policy terms, activists say "defund the police" is not actually a call for a country with no cops.

"It does not mean a world where we do not have safety and justice. It does not mean a world where we do not have order," Robinson said. "But what it does mean is that right now we seem to try to solve all of our society's problems by increasing the role and responsibility of law enforcement, and it has not worked."

Elzie said "defund the police" means "reducing police budgets, to me, down to the bare minimum."

"And seeing that money go to public schools in the city would make me extremely happy. Or investing in mental health services in the state. There's so many other things we should do with that money," she said. "If the police want to go buy M16s, they should f---ing organize a bake sale."

As Trump rallies his base against calls to "defund the police" and Biden distances himself from them, the movement is seen as unlikely to get its wishes. Yet it appears to be having an impact on the debate, as some major cities, like Los Angeles and New York, discuss reductions in police funding.

Advocates point to other movements over the past decade that have pushed radical-sounding ideas that altered the debate. The "Medicare for All" movement turned a public insurance option into a consensus position among Democrats after moderates in the party killed it in 2009. The "abolish ICE" effort nudged mainstream lawmakers to call for fewer deportations and to limit the power of Immigration and Customs Enforcement.

"It's not the job of activists to present poll-tested ideas," said Sean McElwee, a left-wing organizer and data scientist who popularized #AbolishICE. "It's the job of activists to demand we imagine a world built on fundamentally different assumptions. We've already seen a number of concrete and actionable policies that can fundamentally change the way we understand policing in this country."

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Conservatives used the tactic effectively under President Barack Obama. Tea party calls to "abolish the IRS" helped fuel IRS budget cuts of about 20 percent during the last decade. The 2011 push to amend the Constitution to require balanced budgets, which likely would have forced steep cuts in Social Security, led to Obama's signing $1 trillion in spending reductions that summer.

"A flat tax of 8 percent? Hell, why not? Just ask for it. You're not going to get it," said Brendan Steinhauser, a Republican consultant who was working in the tea party movement at the time. "On these sorts of things stake your position, ask for everything, knowing you're going to get your politicians to move a little bit."

Steinhauser said Biden "isolates himself from the backlash by finding a safe moderate position that is reasonable that calls for reform and calls for transparency and better training and punishment for cops that act poorly and criminally."

"His instincts are right on this one from a political standpoint," he said. "Republicans want nothing more than for Biden to embrace the most radical ideas."

Full coverage of George Floyds death and protests around the country

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Democratic leaders clash with Black Lives Matter activists over 'defund the police' - NBC News

Former Vice President Joe Biden's close relationship with Sen. Bernie Sanders and willingness to engage with progressives could spell a difference between the 2020 presidential contest and former Democratic nominee Hillary Clinton's failed 2016 bid, Sanders said in an interview in The New Yorker magazine published on Tuesday.

"I think the difference now is that, between you and me, I have a better relationship with Joe Biden than I had with Hillary Clinton, and that Biden has been much more receptive to sitting down and talking with me and other progressives than we have seen in the past,"the Vermont lawmaker said.

Sanders competed against Clinton in 2016, and was the last Democrat standing against Biden during the 2020 primary contest. Democrats loyal to Clinton, with whom Sanders had an icy rapport, have criticized Sanders for what they saw as his insufficient effort to get his progressive backers behind her in 2016 after she defeated him in the primary.

Pressed to address that criticism, Sanders told The New Yorker that he did everything he could to get Clinton elected. But he said there was a misconception about how much influence candidates, on their own, can have on their supporters' votes.

"There is a myth out there that all a candidate has to say, whether it's Bernie Sanders or anybody else, to millions of people who voted for him or her, is, 'I want you to do this,' and every single person is going to fall in line," Sanders said. "That's just not the way it works in a democracy."

This time around, Sanders again lost to a candidate located ideologically to his right. But, Sanders said, Biden's apparent willingness to shift to the left on some issues could move the needle.

"I think you're going to see him being rather strong on the need for a new economy in America that does a lot better job in representing working families than we currently have," Sanders said. "He has told me that he wants to be as strong as possible in terms of climate change, and I look forward to hearing his proposals."

A spokesperson for Clinton did not respond to a request for comment.

Sanders endorsed Biden in April shortly after he dropped out of the race. The endorsement, which came far earlier in the cycle than his 2016 endorsement of Clinton, was seen as a major boost to Biden's campaign.

The two candidates announced at the time of Sanders' endorsement that their campaigns would form joint task forces to work out compromises on policy in six major areas: The economy, education, climate change, criminal justice, immigration reform and health care.

Sanders didn't say how much progress the task forces had made in the intervening months, though he said the two men were talking by phone. On the issue that most animated Sanders' political rise making health care free at the point of use Biden has notpublicly budged, even as Covid-19 has swept through the country and led to unprecedented job losses.

Addressing the task forces, Sanders said, "We'll see what the fruits of those discussions are." He said he didn't want to sugarcoat the differences between the two men ideologically.

"He has been open and personable and friendly, but his views and my views are very different, in some areas more than others," Sanders said. He added:"But Joe has been open to having his people sit down with some of the most progressive folks in America, and that's a good sign."

In a statement, Biden spokesman Andrew Bates said that "Joe Biden and Bernie Sanders are friends and share a steadfast belief that we need a government that will deliver for working families."

"Senator Sanders and his team have been extraordinary partners in offering advice and support on the biggest challenges of our day, such as overcoming climate change and rebuilding the American middle class especially after the COVID-19 outbreak," Bates said.

Also in the interview, Sanders, a self-avowed democratic socialist, held out hope that a future candidate with his beliefs will be more successful than he was.

"Biden just mopped us up with older people," Sanders said. "On the other hand, even in states where we did poorly, and lost, we won a majority of young people, forty or younger. That's the future of America."

A spokesperson for Sanders didn't respond to an inquiry about whether he wanted to elaborate on his remarks.

Biden is currently leading President Donald Trump in national surveys by about 8 percentage points, according to an average of recent polls collected by RealClearPolitics.

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Joe Biden is 'more receptive' to progressives than past Democrats, Bernie Sanders says - CNBC