Iraq’s oil ministry said that it had begun loading a tanker with 2 million barrels of crude oil bound for Egypt, marking the first shipment under a bilateral agreement,according to al-Ahram, an Egyptian State-owned newspaper.
The ministry said that under a one-year agreement reached last month between Baghdad and Cairo, Iraq will sell 12 million barrels of oil to Egypt,
The announcement comes a couple of months after Iraqi envoy to Egypt Habib Al-Sadr said in press statements that Iraq’s oil marketing company SOMO had inked the supply contract.
Al-Sadr stated that Iraqi and Egyptian officials finalized the technical aspects of the contract after receiving the green light from their respective political leadership.
The head of Egypt’s state oil company EGPC, Tarek El-Hadidi, had recently confirmed that a deal was signed with the Iraqi government to import Iraqi oil under a one-year agreement, which could be renewed.
Last October, negotiations on exports of Iraqi oil to Egypt began during the Minister of Petroleum Tarek el-Molla’s visit to Iraq.
In the same context,Molla discussed with Iraqi officials refining Iraqi crude oil in Egypt and then exporting it again in the form of products to Iraq, he said during the conference.
Moreover, they also discussed establishing development projects by Egyptian companies in Iraq.
Since November 2016, Egypt has been aiming to secure its domestic market needs to replace the oil shortage after the Saudi national oil company Aramco halted shipments of oil products that had been part of a multi-billion dollar aid deal.
Saudi Arabia suspended its shipments in October 2016 as a result of Egypt’s vote in favor of a Russian-backed draft resolution in the UN Security Council on Syria.
However, signs of reconciliation appeared recently between Egypt and Saudi Arabia when Aramco decided last March to resume oil shipments to Egypt following a six-month suspension.
The move signaled a potential thaw in relations after months of tension between both countries.