The Jordanian Ministry of Energy and Mineral Resources announced Wednesday that Iraq has approved a three-month extension of the memorandum of understanding for supplying oil to Jordan under the same contractual terms and price.

Engineer Iman Awad, Director of the Oil and Natural Gas Sector at the ministry, confirmed that all necessary measures have been taken by Jordan. Coordination is currently underway with Iraq to finalize procedures for the loading of crude oil from Kirkuk to the Jordan Petroleum Refinery in Zarqa.

“The supply is expected to begin within the next few days,” Awad said. “Additionally, we have contacted the Iraqi side to renew the memorandum of understanding for one year, starting from the date of completion of loading the remaining quantities from the current memorandum, which is anticipated to be completed during the extension period.”

The total amount of Iraqi oil not supplied from the previous memorandum of understanding to Jordan amounts to 330,643 barrels.

The Jordanian government announced on May 12 that the recent halt in importing Iraqi crude oil was due to the expiration of the memorandum of understanding between Jordan and Iraq, which was signed on May 4, 2023.

In 2006, Jordan and Iraq signed an agreement for the supply of 10,000 barrels of oil per day to Jordan at discounted rates, initially $18 per barrel below the global price, increased to $22 per barrel in 2008. This supply was halted from 2015 to 2019 due to ISIS control in western Iraq.

In February 2019, the agreement resumed with oil from Iraq's Kirkuk fields, meeting 7 percent of Jordan’s needs. By late 2019, shipments continued with Jordan buying oil at Brent crude prices minus $16 per barrel for transport and specification adjustments.

This preferential pricing saves Jordan about $160,000 daily, nearly $5 million monthly, and $58 million annually with uninterrupted supply. In March 2023, the Iraqi Parliament renewed the agreement, maintaining these preferential terms.

In early January, nine lawyers filed a lawsuit against Iraqi Prime Minister Mohammed Shia' al-Sudani to stop the export of Iraqi oil to Jordan, claiming it was a “waste of the country's funds.”

The Federal Court dismissed the lawsuit, disputing the price difference cited by the lawyers, stating that the lower price compared to Brent crude was due to the oil’s “lower quality,” as per the memorandum of understanding between the two countries.