Iraq to supply Jordan with 10,000 bpd of crude at reduced prices

Aug 17, 2006, 13:05 GMT

Amman - Iraq has agreed to supply Jordan with 10,000 barrels of crude oil per day (bpd) at 'preferential prices,' Jordanian Minister of Industry and Trade Sharif Zoabi said in remarks published Thursday.

'Iraq has agreed to supply Jordan with 10,000 bpd, which represents 10 per cent of Jordan's energy requirements,' Zoabi said.

The deal was part of a memorandum of understanding that was signed during Prime Minister Marouf Bakhit's visit to Iraq on Tuesday, he added.

The minister did not give further details, but government sources said that the new Iraqi crude oil supplies to Jordan would be transported by tanker cars.

The two countries discussed ways for ensuring protection for the tankers and agreed to set up a joint security panel to address the issue, the sources said.

Jordan has a tanker fleet of about 2,000 cars, but the murder of a number of Jordanian drivers by armed men on the highway between the two countries over the past couple of years could represent a thorny issue for the resumption of Iraqi oil supplies to Jordan, the sources said.

The former Iraqi regime of President Saddam Hussein supplied Jordan with crude and oil derivatives at half price.

Iraqi oil supplies to Jordan came to a halt on the eve of the US-led invasion of Iraq in March 2003 that toppled Saddam's regime.

Since then three Gulf oil producing countries, Saudi Arabia, Kuwait and United Arab Emirates, volunteered to supply Jordan with its energy needs amounting to 100,000 bpd free of charge.

However, the three countries decided to stop their oil donations last year, a move that played havoc with Jordan's public budget deficit, given the surging crude prices on the world market.