Iraq's State Oil Marketing Organization, or SOMO, has raised the official selling price of its Kirkuk crude destined for Jordan by $4, an Iraqi oil official said Sunday.
The Kirkuk crude oil destined for Jordan in January was set at dated Brent minus $18 a barrel, instead of the earlier agreed price of dated Brent minus $22 a barrel, the official told Dow Jones Newswires by telephone from Baghdad.
He said the move came after oil prices slipped dramatically over the last few weeks.
Crude oil prices slipped as much as $34 a barrel over the last few days, the lowest price in four years, from a record high of $147 a barrel last July.
During a summer visit by Iraq's Prime Minister Nouri al-Maliki to Amman, Iraq agreed to sell Kirkuk crude to Jordan at a discount price of dated Brent minus $22.
Iraq sells to Jordan between 8,000 to 10,000 barrels a day via trucks loading the crude from Baiji refinery, 200 km north of Baghdad, to Jordan's only refinery al-Zarqa near Amman. That amount constitutes less than 10% of Jordan's need to fuel Zarqa.
Iraq agreed in August 2006 to supply Jordan with between 10% and 30% of its oil needs of around 100,000 barrels a day at preferential prices during a visit by al-Maliki to Jordan. Deliveries, however, didn't start until recently because of security along the highway between the two countries.
Before the U.S.-led invasion, Baghdad was Jordan's main energy supplier, delivering over $700 million worth of crude and oil products annually to the kingdom under undisclosed concessionary terms.
Iraq's oil sales to Jordan were halted after the fall of Saddam Hussein's regime in 2003.
Jordan has been relying on imported Saudi and Kuwaiti crude to keep its refinery running.