Iraqi lawmaker proposes bill to end economic benefits to Jordan for its protection of Israel

Amid growing regional tensions, an Iraqi lawmaker has submitted a bill to the parliament calling for an end to Iraq's economic benefits provided to Jordan. This move follows Jordan's recent interception of Iranian missiles targeting Israel, sparking political and economic reverberations in the region.

Iraq, which recently increased its oil exports to Jordan from 10,000 to 15,000 barrels per day, offers oil at a preferential rate, typically $12 to $16 lower than global Brent crude prices. These exports are part of a broader economic agreement between the two nations, encompassing not just discounted oil, but also customs exemptions and infrastructure cooperation. 

Jordan relies on imports from Iraq and Israel to meet its energy needs, with Iraqi oil accounting for about 7 percent of Jordan's crude oil consumption.

The bill, presented on 6 October by Iraqi independent lawmaker Hadi Hassan Salami from Najaf, was addressed to the presidency of Iraq's parliament. The proposal calls for terminating these economic advantages to Jordan, following what some perceive as Jordan's alignment with Western and Israeli interests. 

Kurdish MP and member of the parliament's legal committee, Dara Sekaniani, told The New Arab that while the bill has not yet been formally submitted to his committee, it is already a topic of discussion among lawmakers.

Sekaniani explained that there are two views on the issue: one suggests that the parliament should debate and pass the bill since it pertains to foreign relations; the other believes the Iraqi government itself has the authority to decide on economic matters with Jordan without parliamentary approval.

Iraqi journalist Omar al-Janabi also told TNA that Iraq's ability to offer preferential oil prices without significant impact on its revenues is partly due to lower transportation costs. However, he cautioned against using oil as a political tool in regional conflicts. "Terminating economic benefits for Jordan must be approached with extreme caution," al-Janabi said. "Using oil as leverage could expose Iraq to unpredictable economic and political shocks."

Al-Janabi also warned that halting oil privileges could strain bilateral relations, prompting Jordan to seek alternatives from Gulf countries like Saudi Arabia and the UAE, which could diminish Iraq's regional influence. He added that Iraq's economic decisions should remain independent and not be drawn into the region's political alignments, particularly the Iran-aligned bloc, which has been increasing its threats and rhetoric against Arab countries, including Jordan.

He also highlighted that the proposed legislation's potential political and economic repercussions have attracted significant attention from both regional powers and the international community. Many fear that closer alignment between Iraq and Iran could result in regional isolation and increased instability. Additionally, there is concern that the United States, which sees Iraq's stability as key to its regional strategy, might step in diplomatically or economically if the bill heightens tensions.

Iran's Revolutionary Guards said they had targeted "three military bases" around Israel's commercial hub, Tel Aviv.

They said the attack was in response to Israel's killing of Hezbollah leader Hassan Nasrallah, as well as the death of Hamas leader Ismail Haniyeh in a Tehran bombing widely blamed on Israel.

Iraq and Jordan, which lie between Iran and Israel, closed their airspace too. Lebanon did too before reopening.

Jordan said its air defences responded to missiles and drones.

As the region grapples with growing volatility, the proposed Iraqi bill has raised questions about the future of Iraq-Jordan relations and the broader implications for regional stability.