Iraq will start exporting some 100,000 barrels a day of its Basra Light crude oil to Iran in accordance with a deal signed recently in Tehran, Iraq’s Oil Minister Hussein al-Shahristani told a news conference in Baghdad Thursday.

According to the deal, signed by al-Shahristani and his Iranian counterpart, Baghdad would sell the crude oil to Iran at international prices. The crude would be shipped in a fleet of trucks to the Iranian refinery in Abadan, he said.
In return, Shahristani said Tehran would start supplying Iraq with 1.5 million metric tons of kerosene a day and 1.5 million tons of gas oil a day.
Iraq and Iran have signed several deals in the past under which Tehran would supply Baghdad with oil products but Iran hasn’t fulfilled these deals, Iraqi oil officials said.
Iraq needs to buy at least 5,000 tons a day of oil products but finds it difficult to conclude deals. The country suffers from acute shortages of oil products since the U.S.-led invasion in 2003.
The Iraqi State Oil Marketing Organization, or SOMO, tendered last month to buy 40,000 tons a month of LPG, and 15,000 tons of kerosene for delivery in the last five months of 2007.
The Baghdad government raised fuel prices from the beginning of last month, the second such move this year.
Iraq’s main three refineries - Doura, Baiji, and Basra - are working at half capacity because of lack of maintenance and investment as well as the deteriorating security situation in the country.
The Iraqi Oil Ministry is planning to build three large refineries to meet growing demand for oil products. One is to be built in northern Iraq, the second in the middle of the country and the third in the south.
Shahristani told reporters the Oil Ministry would soon issue new tenders to build these refineries.
(Source: Dow Jones