Iraq and Jordan have agreed to extend an oil pipeline to the Red Sea city of Aqaba for the export of Iraqi oil to satisfy Jordan’s crude requirements.
The agreement was made on Monday during a visit by Iraqi Prime Minister Nouri al-Maliki to Amman.
"It was agreed to extend an oil pipeline across Jordan to Aqaba to export Iraqi oil and satisfy Jordan's crude requirements," the Iraqi premier told journalists, adding that this would "end the transportation of oil using tankers."
The new pipeline would be capable of pumping one million barrels per day.
Iraq also agreed to "bring into effect a 2009 agreement to establish a free trade zone between the two countries," and "to increase the capacity of (its) gas pipeline" "to secure Jordan's Iraqi natural gas needs," Jordan's official news agency Petra said.
Jordan relies on imports for 95 percent of its energy needs. It currently imports 10,000 barrels of Iraqi oil per day and has recently agreed to increase that amount to 15,000 barrels.
Iraq delivered oil to Jordan for preferential prices during the rule of Dictator Saddam Hussein, and in return, Amman opposed sanctions and war against Iraq.
The Jordanian government cut fuel subsidies in November in a bid to tackle a budget deficit of 3.5 billion dinars (USD five billion). The sweeping subsidies’ decision, which increased fuel prices by up to 50 percent, sparked mass street protests in the country.