Page 8 - MEOG Week 10 2023
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MEOG POLICY & SECURITY MEOG
Jordan keen to raise oil imports from Iraq
JORDAN/IRAQ JORDAN aims to boost its oil imports from Iraq, it was reported that Jordan would purchase the
with negotiations currently underway to renew oil at a $16 per barrel discount to Brent in order
the memorandum of understanding (MoU) to cover the transport and deviation in specifica-
between the two countries for the supply of Iraqi tions with Iraqi goods exported through the port
crude oil. of Aqaba, receiving preferential rates in return.
Hassan Al-Hiyari, Assistant Secretary-Gen- However, in 2021, Alaa al-Yasiri, general
eral for Energy Affairs at the Jordanian Ministry manager of Iraq’s state oil marketer Somo, told
of Energy, revealed the talks in an interview with Iraq News Agency (INA): “The Oil Marketing
Sky News Arabia. Company does not have differential prices, but
The MoU, which originally covered a set rather fixed prices according to the market …
period, has already been extended for three Jordan stipulated that, according to the Cabinet’s
months, from January to March. Jordan is now decision, the transportation cost was calculated
seeking to increase the amount of crude oil it at $11 from Baiji to Jordan, and this is among the
receives from Iraq through these ongoing nego- items of bilateral agreements between the two
tiations, according to Al-Hiyari. countries, and the supreme interest is valued by
Hashim Aqel, Jordanian oil expert, was the country and the government.”
quoted as saying that the country’s demand is With security issues in Iraq leading to a five-
estimated at 140,000 barrels per day (bpd), how- year hiatus from 2014 to 2019, shipments were
ever, the import levels from Iraq fall well short of severely affected again in 2020 by the pandemic
this, meaning crude must be brought in via the and the resultant drop in oil price led to several
port of Aqaba. pauses in supplies and no crude at all sent to Jor-
In January, trucks filled with Iraqi crude dan in August 2020.
resumed crossing the border into Jordan follow- Cargoes resumed in September 2022 fol-
ing a month-long hiatus. lowing a July agreement between Amman and
The resumption followed the latest three- Baghdad on the resumption, with Iraq complet-
month extension of a bilateral deal originally ing all of the required logistical preparations.
signed in February 2019, which has been Former Jordanian Minister of Energy and Min-
renewed several times since. eral Resources Hala Zawati said that crude flows
This deal provided for Iraq to supply 10,000 had stopped after prices fell below $20 per barrel.
bpd – covering around 7% of Jordan’s oil demand The January renewal came just a few days after
– trucking crude from the Baiji refinery to the Amman and Baghdad said that they would soon
Jordan Petroleum Refinery Co. (JPRC) at Zarqa. begin implementing the Basra-Aqaba crude oil
After lengthy delays, the first batch of Iraqi crude pipeline, underpinning continually improving
was trucked from Baiji to Jordan via Kirkuk in bilateral relations. Meanwhile, JPRC continues
September 2019. to work to implement a long-awaited expansion
When the 2019 agreement was announced, of its Zarqa refinery.
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