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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