Iraq, Jordan agree deal over trade of oil and goods

Iraqi Prime Minister Adel Abdul-Mahdi meets with Jordan’s Prime Minister Omar Al-Razzaz and officials on the Iraqi-Jordanian border, Iraq February 2, 2019. (Iraqi Prime Minister Media Office/Reuters)
Updated 02 February 2019

Iraq, Jordan agree deal over trade of oil and goods

BAGHDAD: Iraq resumed oil deliveries to neighboring Jordan on Saturday as the premiers of both countries met along their shared border as part of a bid to boost trade.
Iraqi Prime Minister Adel Abdel Mahdi met with his Jordanian counterpart Omar Al-Razzaz at the Treibil border crossing, referred to as Al-Karameh in Jordan, which reopened in August 2017.
The only crossing between the two countries was shuttered in 2014 as the Daesh group swept across Iraq, but was reopened after Iraqi forces pushed back the militants.
Baghdad declared victory against Daesh in late 2017.
On Saturday, the two sides agreed that Iraq would provide Jordan with 10,000 barrels of crude a day transported by truck from oil-rich Kirkuk province at a special price, Jordan’s official Petra news agency said.




Jordan’s Prime Minister Omar Al-Razzaz stands with his Iraqi counterpart Adel Abdul-Mahdi on the Iraqi-Jordanian border, Iraq February 2, 2019. (Iraqi Prime Minister Media Office/Reuters)

It did not say what the price was or when the oil would be exported.
Iraqi goods imported via Jordan’s Aqaba port on the Red Sea would meanwhile receive preferential tariffs, it said.
Aqaba port at the north end of the Red Sea has long been a major transit route for Iraqi imports and exports, and Amman has long relied on Iraqi crude to fuel its economy.
Transport costs would be taken into account under the deal, according to Petra, and the possibility of Baghdad granting discounts to Amman has upset some Iraqis.
Amman is pushing to meet its hydrocarbon needs through a pipeline project that would connect Basra on the southern tip of Iraq with the Jordanian port of Aqaba.
The two countries said Saturday they had begun studying its construction.
Abdul Mahdi says the government aims to decrease dependency on oil exports for state revenue. Oil exports from OPEC’s second-largest producer account for more than 95 percent of state revenues.
In January, Jordanian King Abdullah II made his second trip to Baghdad in more than a decade after a flurry of meetings between senior officials of both countries.
For its part, Iraq is looking for solutions to its chronic electricity shortages.
To secure an exemption from US sanctions on Iran, Baghdad has announced plans to curb its reliance on electricity supplied by Tehran and buy power from Jordan, Turkey and Kuwait.
The two premiers agreed Saturday that Jordan would begin providing electricity to Iraq “in less than two years,” according to Petra.
The two sides also agreed to lift Iraqi taxes on hundreds of Jordanian products, and to establish a joint industrial zone along the border, according to statement issued by the prime minster’s office.


Etihad and Air Arabia start Abu Dhabi-based budget carrier

Updated 43 min 54 sec ago

Etihad and Air Arabia start Abu Dhabi-based budget carrier

  • The new Air Arabia Abu Dhabi will be launched in due course: Etihad CEO
  • Etihad invested heavily in carriers around the world

LONDON: Etihad Airways is setting up a low-cost carrier with Air Arabia in what is a major change of direction for the Abu Dhabi-based airline.
It represents Etihad’s first tie-up with another airline since its ill-fated equity alliance strategy which saw it take stakes in a number of struggling European carriers, some of which went bust, including Air Berlin.
Air Arabia Abu Dhabi will operate from Abu Dhabi International Airport and will target rising demand from the budget segment, the pair said in a statement on Wednesday.
Etihad Group CEO Tony Douglas said: “This exciting partnership supports our transformation program and will offer our guests a new option for low-cost travel to and from Abu Dhabi, supplementing our own services.”
Abu Dhabi-based Etihad and Dubai-based Emirates invested heavily in their premium-cabin offering during the UAE’s boom years, tapping into strong regional demand for business and first-class travel. However, the sharp fall in oil prices since 2014 and a regional economic slowdown has hit premium travel hard and forced both carriers to cut costs and lay off staff.
Etihad’s move into the low-cost segment mirrors a similar partnership between Emirates and flydubai, the low- cost carrier started in 2008.
Etihad and Air Arabia did not say when flights would start or which routes would be served, but that further details “would be communicated in the near future.”
While premium travel continues to face headwinds in the Gulf, demand remains strong in the budget segment. Low-cost carriers accounted for a 17 percent share of seat capacity to and from the Middle East in 2018, compared to only 8 percent in 2009. 
Etihad Airways currently flies to about 80 destinations with a fleet of 108 Airbus and Boeing aircraft that carried 17.8 million passengers in 2018. Air Arabia, which is listed on the Dubai Financial Market, operates 54 Airbus A320 and A321 aircraft and serves 170 routes.