Oil after Riyadh: Lucrative Iraq-Egypt crude deal 'within days'

In an interview with Egyptian state media, Habib al-Sadr said that the deal was both affordable for Egypt, and that there was scope for Baghdad to increase the amount of oil it supplies per month.

Baghdad signed a provisional agreement with Cairo regarding oil supplies in March 2016, with further discussions held during the visit of Egypt’s petroleum minister Tariq al-Mulla to Baghdad last October.

Mulla’s visit at that time came a matter of days after Saudi Arabia announced the suspension of a long-term agreement with Egypt to provide oil to the country.

A frosting of diplomatic relations between the two states in part related to Riyadh’s anger at a perceived warming of ties between Egyptian President Abdel Fatah al-Sisi and the Assad regime in Damascus.

Speaking in October Mulla said that Egypt had ample refining capabilities to import crude oil direct from Iraq, noting that Egyptian companies were present in Basra’s oil fields and had purchased a 10 percent share of Block 9 – an 866 km2 area in which the Kuwaiti Energy Corporation owns a 60 percent share.

Egypt’s previous oil arrangements with Saudi Arabia, if continued to completion, would have seen Riyadh supply 700,000 tonnes of refined oil products per month to Cairo over five years in a $23 billion deal.

Since its collapse Egypt, currently in the midst of severe economic woes that have contributed to growing civil unrest, has been searching desperately for a replacement deal.

In November Kuwait agreed to supply Egypt with two million barrels of crude per month, starting in January, making up some of the shortfall.