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Iraq, September 2, 2019
Iraq begins exporting 10,000 bpd of Kirkuk oil to Jordan

ERBIL, Kurdistan Region – Jordanian oil refineries are to receive their first delivery of oil from Kirkuk after a fleet of trucks set off from the disputed province on Sunday morning, according to Iraq’s oil ministry.

Assim Jihad, spokesperson for Iraq’s oil ministry, confirmed to Rudaw English on Sunday that Baghdad had begun exporting Kirkuk oil to Jordan.

“The Iraqi oil ministry officially started to send oil trucks carrying the oil of Kirkuk to be offloaded in Jordanian oil refineries,” Jihad said. “The oil is from Baiji field in Kirkuk and Iraq is dedicated to export 10,000 barrels per day (bpd) to Jordan.”

Iraq and Jordan signed an agreement in February this year which saw trade tariffs lifted on Jordanian products in exchange for the 10,000 bpd oil quota from Iraq.

Hala Zawati, Jordan’s minister for oil, told Jordanian state TV on Saturday that Amman expects to receive its first batch of Kirkuk oil on Tuesday.

“According to the agreement we signed with Iraq in February 2019, we will receive the first batch of oil trucks carrying Kirkuk oil on Tuesday, since Iraq will start to load the trucks with oil from Baiji oilfields on Sunday,” Zawati said.

“Jordan is receiving 10,000 bpd of oil at the moment from Iraq, but this number will increase in the future, in case Jordan demands more oil,” she added.

More than 200 oil trucks are being used to transport the oil, Zawati said.

Currently, Jordan consumes 150,000 bpd of oil. Iraq’s deliveries will constitute roughly 7 percent of Jordan’s daily oil consumption, she added.

Jordan will buy Iraq’s oil at the Brent crude price, excluding the cost of transportation and irrespective of the oil’s quality.

The sale of Kirkuk’s oil is a touchy subject for Kurds, who controlled the administration, security, and oilfields of Kirkuk between 2014 and 2017, defending the province from repeated attack by the Islamic State group (ISIS).

With a substantial Kurdistani population, and enough potential oil wealth to finance an independent Kurdish state, Kurds consider Kirkuk city and its hinterlands their Jerusalem.

Article 140 of Iraq’s 2005 constitution was drafted to solve the dispute, allowing for a referendum to be held so that Kirkuk’s residents could choose whether to join the semiautonomous Kurdistan Region or remain a federal province of Iraq. Such a vote has never been held.

When the Kurdistan independence referendum was held in September 2017, Baghdad feared the Kurdistan Regional Government (KRG) would annex the province, and responded militarily.

Iraqi forces retook the disputed province and its oilfields on October 16, 2017. The KRG lost half its oil revenues overnight. Oil exports via the pipeline linking the Kurdistan Region to ports in Turkey were suspended for several months.

Exports have since resumed, and relations between Erbil and Baghdad are slowly improving. Several disputes over territory, budget shares, and independent oil sales, however, remain unresolved.

In July, Iraq’s Prime Minister Adil Abdul-Mahdi suggested Iraq could extend its pipeline from Kirkuk to Jordan to allow Iraq to diversify its export routes and bypass the Kurdistan Region.

Amid tensions in the Persian Gulf, and particularly the Strait of Hormuz through which Iraq exports most of its oil, Baghdad is keen to find other options to protect its revenues.