According to Saleh Kharabsheh, Minister of Energy and Mineral Resources, Jordan has made contact with Iraq to extend the Memorandum of Understanding (MoU) for the import of crude oil.
According to the minister, Jordan imported about five million barrels of oil between May 4 and July 30, 2023, from the state-of-the-art storage facility in Kirkuk, Iraq. The transport was made possible by tankers from both Jordan and Iraq, guaranteeing a steady supply of oil to the Jordan Petroleum Refinery Company (JPRC).
Importing crude oil from Iraq, according to Kharabsheh, is in line with the original Memorandum of Understanding that the governments of Jordan and Iraq signed on May 4, 2023.
As per the terms of this deal, Jordan buys Kirkuk crude from Iraq at a price that is equivalent to the monthly average of Brent crude oil minus USD 16 per barrel.
This price structure covers 7% of Jordan’s crude oil demand while taking into consideration variations in quality and transportation expenses.
The Iraqi Cabinet has given its approval for an increase in the daily allotment of crude oil to Jordan, commencing in August 2023, from 10,000 barrels to 15,000 barrels. The JPRC in Zarqa will receive these extra quantities via truck from the storage facility in Kirkuk, according to Petra, the Jordan News Agency.
Due to this extension, Iraq’s monthly oil exports to Jordan have risen from 300,000 barrels to about 450,000 barrels or almost 10% of Jordan’s total crude oil needs.
Noting that the extension covers the remaining undelivered quantities mentioned in the original agreement, Kharabsheh emphasised that the Memorandum of Understanding has been extended for an additional three months while keeping the same terms and conditions. This ensures a consistent supply of oil.
Iman Awad, the ministry’s director of oil and gas, mentioned that plans are in motion to draft a new Memorandum of Understanding between Jordan and Iraq, strengthening their existing energy cooperation.