Iraq resumes oil deliveries to Jordan at discounted price after two-month halt

Oil official blames 'bureaucracy' for the delay, but political differences are seen as a factor.

The Jordanian Energy Ministry said up to 15,000 bpd of Iraqi oil will be supplied to the kingdom until June 2025. Reuters

Iraq has agreed to resupply Jordan with up to 15,000 barrels per day of crude oil at a discounted price, the kingdom's Energy Ministry said, after a two-month halt believed to be politically related.

An Iraqi official, who works for the ministry's oil marketing division SOMO confirmed on Monday that the deal had been renewed and blamed “bureaucracy” for the delay.

He said that the oil would be taken by lorry to Jordan, adding that the amount was increased to 15,000 bpd last year “at Jordan's request”.

An 18-year oil deal, subject to renewal regularly, has long been affected by political differences between Amman and Baghdad.

In August last year, the two sides agreed to raise the quantity to 15,000 bpd from 10,000 bpd, an Iraqi oil official said. However, the flow of oil completely stopped at the beginning of May this year, after the agreement expired and was not renewed.

The Jordanian Energy Ministry said up to 15,000 bpd of Iraqi oil will be supplied to the kingdom until June 2025, at $16 less than the price of Brent crude. It did not say when the export of oil from Iraq would start.

The discount is given to compensate for the quality of the oil and the cost of transport to Jordan, it said. Brent was trading at $82.47 by midday GMT. Jordan receives oil from Kirkuk which is of lower quality than Brent crude from the south.

Oil Minister Saleh Al Kharabsheh said that the resumption would help increase economic co-operation between Jordan and Iraq.

Ties between the two countries have soured since the Iran-backed Shiite political ascendancy that came to power in Iraq after the fall of Saddam Hussein in 2003.

However, three years later, Iraq agreed to export 10,000 bpd at a discounted price as part of an attempt to improve relations.

Shortly before the deal was due for renewal last May, Kuwait’s Emir Sheikh Meshal visited Jordan. Both countries called on Iraq to adhere to a maritime deal that was annulled by the Iraqi Federal Supreme Court in September and to complete the delineation of the maritime border.

That sparked anger in Iraq, mainly among Shiite lawmakers.

The flow of Iraqi oil, which accounts for 7 to 10 per cent of Jordanian oil imports, has been interrupted before, especially during heightened political tensions. Jordan, which produces small amounts of oil, relies on imports from Saudi Arabia for most of its crude oil needs.