Iraq has signalled its readiness to resume crude oil shipments to Egypt, welcoming Cairo back as a potential buyer after energy cooperation between the two countries effectively stalled at the end of 2023 over a financial dispute that left a previously well-established supply arrangement in limbo.
Ali Nizar al-Shatri, Director of Iraq’s State Organisation for Marketing of Oil, confirmed there is currently no active agreement with Egypt but said Baghdad would welcome Egypt as a buyer if it stepped forward and dispatched tankers to Iraq’s southern ports in accordance with standard commercial contracts. Egypt, for its part, is understood to be considering resuming imports of approximately 12 million barrels of Basra crude annually as it seeks to diversify its oil supply sources and reduce dependence on existing credit-backed arrangements with Kuwait and Saudi Arabia.
The original oil supply relationship between the two Arab nations dated back to April 2017, when the Egyptian General Petroleum Corporation and SOMO signed a one-year agreement covering the delivery of 12 million barrels of Basra Light crude — shipped in tranches of two million barrels — with provisions for renewal. The contract was extended repeatedly until it broke down at the end of 2023, when financial disagreements arose amid Egypt’s push to secure more favourable payment terms, including a request to defer payment for shipments for up to three months after delivery.
Egypt currently imports approximately one million barrels per month each from Kuwait and Saudi Aramco under arrangements that include credit facilities, giving it some cushion against immediate supply disruptions. However, the desire to broaden sourcing options and reduce dependence on any single supplier has renewed interest in Basra crude, particularly as Iraq has in recent years redirected some of its lighter grades to domestic consumption — a shift that complicates but does not preclude a return to bilateral trade if Egypt is willing to engage on commercially viable terms.
Source: Iraq News