The impending economic sanctions being imposed on Iran by the US following President Trump’s decision to withdraw from the Joint Comprehensive Plan of Action in May will not impact the present crude oil swap arrangement between the Islamic republic and its neighbour Iraq, according to Reuters.
Iraq’s Oil Minister, Jabar Al Luaibi, speaking at the recent Organisation of the Petroleum Exporting Countries meeting in Vienna, confirmed that the deal would remain in place. In theory, the tie-up sees Iraq provide Iran with crude oil from its northern fields in Kirkuk to be utilised in its refineries, while Iran subsequently swaps the same amount via Iraq’s southern port in Basra.
Luaibi told the news agency that currently the crude being shipped to Iran was being made in payment for electricity Iraq had received, rather than as a crude swap. “We have just started really small quantities for their refineries, not on a swap basis,” he stated.
The threat of imminent punitive sanctions on Tehran has seen several blue-chip international companies back out of deals and future involvement in Iran. French supermajor Total’s CEO Patrick Pouyanné has already announced that it is likely its own big ticket deal at the South Pars gas field is likely to be scrapped unless the firm receives a special waiver.