Jordan's Crude Oil Imports from Iraq Halted as MoU Expires

Jordan's imports of Iraqi crude oil have been suspended after a bilateral memorandum of understanding expired on April 5, 2024. Jordan has proposed a three-month extension to complete contracted oil volumes, pending Iraqi approval.

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Nitish Verma
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Jordan's Crude Oil Imports from Iraq Halted as MoU Expires

Jordan's Crude Oil Imports from Iraq Halted as MoU Expires

Jordan's imports of Iraqi crude oil have been suspended following the expiry of a bilateral memorandum of understanding (MoU) with Iraq, signed on April 5, 2023. The MoU, which accounted for approximately 7% of Jordan's total crude oil consumption, expired on April 5, 2024.

Why this matters: The temporary suspension of Iraqi crude oil imports highlights Jordan's vulnerability to energy supply disruptions, which can have significant economic and social implications for the country. This development also underscores the need for Jordan to diversify itsenergy sources and reduce its reliance on imported oil to ensure energy security.

Iman Awad, Director of Oil and Natural Gas at Jordan's Ministry of Energy and Mineral Resources, stated that "Jordan has proposed extending the existing MoU for an additional three months under identical conditions to complete the transfer of contracted oil volumes." The extension is currently pending mutual approval from Iraqi authorities.

The Ministry of Energy and Mineral Resources is actively working with Iraqi authorities and through the Jordanian embassy in Baghdad to obtain the requisite approvals for the extension. Discussions for a new MoU will begin following the completion of all deliveries under the current agreement.

Jordan and Iraq have a long history of economic cooperation, particularly in the energy sector. The two countries signed their first MoU for the supply of crude oil in 2006, which has been periodically renewed and expanded over the years. The agreement has been crucial for Jordan, which relies heavily on imported energy to meet its domestic needs.

The temporary suspension of Iraqi crude oil imports comes at a time when global oil prices remain volatile. Jordan, like many other oil-importing countries, has been grappling with the economic impact of fluctuating energy prices. The government has been working to diversify its energy sources and reduce its reliance on imported oil.

As Jordan awaits approval from Iraqi authorities to extend the expired MoU, the Ministry of Energy and Mineral Resources is exploring alternative options to ensure a stable supply of crude oil. The country's strategic oil reserves are expected to provide a buffer during this interim period until imports from Iraq can resume under a renewed agreement.

Key Takeaways

  • Jordan's imports of Iraqi crude oil suspended due to expired MoU.
  • MoU accounted for 7% of Jordan's total crude oil consumption.
  • Jordan proposes 3-month MoU extension to complete oil deliveries.
  • Discussions for new MoU to begin after current agreement completion.
  • Jordan explores alternative options to ensure stable oil supply.