Iraq resumes oil exports to Jordan after hiatus

1. Picture
The Basra-Aqaba Oil Pipeline, also known as Iraq-Jordan Export Pipeline, is a proposed oil pipeline which stretches from Basra in Iraq’s southernmost tip to Jordan’s Red Sea Port of Aqaba. The graphic shows Iraq’s borders with Turkey, Iran, Kuwait, Saudi Arabia, Syria and Jordan. (Photo: Twitter)
AMMAN — Iraqi crude oil exports to Jordan resumed following a nearly two-month hiatus, which the government attributed to logistical reasons, but local experts contended was sparked by political tensions in Iraq.اضافة اعلان

On Monday, local media outlets quoted Minister of Energy and Mineral resources Saleh Al-Kharabsheh as saying that “following completion of logistical procedures, Iraqi oil exports to Jordan have been resumed.”

Energy expert Amer Al-Shobaki pointed out that “Jordan imports around 1,000 barrels of Iraqi crude oil a day, providing jobs to 250 tanks and truck drivers, thus, reducing unemployment in the transportation sector.”

“In addition, Iraq offers preferential prices for the oil exported to Jordan, with a discount reaching $16 under the Brent benchmark,” Shobaki told Jordan News.

He said the discount “leaves around $7 for transportation cost, and $7 to $8 in revenues per barrel for the government”, he added.

“Jordan makes about $25 million revenues each year due to this discount,” he revealed.

He explained that the reason for the suspension of Iraqi oil exports in the past two months “is due to the fact that Iraqis had problems in controlling the Kirkuk oil field, which is within the jurisdiction of the Kurds”.

Other reasons, he noted, included “certain problems in the exchange of underground wealth between the central government of Iraq and the government of Kurdistan”.

He maintained that “Iraq needs to export oil through Jordan, since it has limited export outlets, including Basrah and Turkey, which is always subject to technical issues and closures.”

Shobaki noted that besides Iraq, Jordan imports the remainder of 40 percent of its need of crude oil, or 40,000 barrels daily, from Saudi Arabia’s Aramco oil company.

“The remaining 60 percent is imported by oil firms, such as Manaseer and Total”, he pointed out.

Shobaki said he hoped that the government will reflect the revenues it generates from the preferential Iraqi price on the local prices of fuel derivatives sold to citizens.

Another energy expert, Hashem Aqel, said that “political circumstances and a decline in crude oil production are the reasons behind ceasing the crude oil imports from Iraq.”

Aqel told Jordan News that “the suspension had not negatively impacted Jordan’s consumption of oil because the country has spare quantities that suffice for almost 30 days.”

“The quantities which were supposed to arrive to Jordan during that period are considered small, thus people did not feel the consequences,” he noted.

He added that “Jordan plays a key role in oil exports, especially if the Iraq-Jordan oil pipeline is in operation.” He said the pipeline is a “vital project that has been initiated since 1980, and could be used in case any export outlets are shut down”.

The Basrah-Aqaba Oil Pipeline, also known as the Iraq-Jordan Export Pipeline, is a proposed oil pipeline which stretches from Basra, in Iraq’s southernmost tip to Jordan’s Red Sea Port of Aqaba. It can transfer around 1 million barrels a day.

“It is beneficial to Jordan”, Aqel said. “It can employ around 20,000 employees, if 250,000 barrels are transferred to Jordan Petroleum Refinery.”

He explained that the benefit is mutual, but “Iraq is the main beneficiary, yet, the preferred price per barrel Iraq gives to Jordan has nothing to do with the pipeline,” he said.

“It is purely for economic reasons” to help Jordan cope with the increasing oil prices, he added.

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