AMMAN (AFP) — Jordan received 11,000 barrels of Iraqi oil by road on Wednesday, the first delivery under a new agreement which revises the subsidy the kingdom receives in the light of spiralling world prices, Energy Minister Khaldun Qteishat said.
"Forty-one tankers laden with 11,000 barrels of crude oil from Iraq crossed the border today," Qteishat told AFP.
"Eighty-eight tankers carrying 35,000 barrels are expected to arrive in Jordan in the next 24 hours."
The deliveries are the first under a new agreement Jordan reached with Iraq this summer which changes the baseline for the discount the kingdom receives on its purchases.
Under a previous deal signed in August 2006, Jordan received an 18 dollar a barrel subsidy on that month's market price which was around 75 dollars a barrel.
But after world prices soared, Iraq insisted on renegotiating the terms of the subsidy when the deal was renewed this summer and the baseline is now the international market price for Brent crude, currently close to 104 dollars a barrel.
When agreement was first reached on renewing the deal in June, the discount was set to remain at 18 dollars a barrel.
But after a visit by King Abdullah II to Baghdad last month -- the first by an Arab head of state since the US-led invasion of 2003 -- Iraq agreed to raise it to 22 dollars a barrel.
The energy minister said that currently the deal was for Jordan to receive 10,000 barrels per day -- roughly 10 percent of its needs -- at the subsidised price from Iraq.
He said he hoped to increase this to 30,000 bpd in the future.
Oil-parched Jordan relies on imports for 95 percent of its energy needs.
The interruption in subidised deliveries from Iraq under the old deal earlier this year forced it to raise pump prices five times helping push the annual inflation rate into double digits.
Under the ousted Iraqi regime of Saddam Hussein, Jordan was entirely dependent on its eastern neighbour for its oil supplies, importing 5.5 million tonnes a year, half of it free of charge and the rest at a preferential rate.
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