US embassy cable - 03KUWAIT1153

S E C R E T KUWAIT 001153 
 
SIPDIS 
 
STATE FOR NEA/FO, NEA/ARP AND NEA/ARN 
STATE ALSO FOR EB/ESC 
 
E.O. 12958: DECL: 1.6 X5, X6 
TAGS: EPET, EAID, PREL, KU, SA, JO 
SUBJECT: TFIZ01 - KUWAITI OIL FOR JORDAN 
 
 
Classified By: Ambassador Richard H. Jones for reasons 1.5 (B) and (D) 
 
1. (S) Ambassador spoke with Kuwaiti Minister of State for 
Foreign Affairs Shaykh Mohammad Sabah Al-Salem Al-Sabah 
afternoon of Thursday, March 27 on the status of Kuwait's 
agreement to provide Jordan with 25,000 barrels of oil per 
day (BPD) in light of the loss of Iraqi oil supplies. 
Ambassador noted USG understanding that the Jordanians were 
loading Saudi oil from the Ras Tanura terminal in the Persian 
Gulf, and suggested the same tanker might load Kuwaiti oil 
from the Neutral Zone terminal at Khafji.  (The GOK had 
previously proposed a swap of Khafji oil for Saudi crude to 
be loaded at the Saudi Red Sea terminal at Yanbu.) 
 
2. (S) Dr. Mohammed said that he had spoken to Jordanian 
Foreign Minister Marwan Muasher earlier, and they had indeed 
already reached such an agreement.  Oil experts were now 
working out the details of a loading schedule. 
 
3. (S) The MinState expressed his surprise that the 
Jordanians were lifting at Ras Tanura, given the short 
distance from Yanbu to Aqaba, and Ambassador opined that 
perhaps a full loading schedule at Yanbu may have precluded 
quick Jordanian access to the facility.  Dr. Mohammed also 
questioned the Saudi refusal to accommodate the proposed 
swap, with Ambassador briefly outlining Saudi concerns about 
the legal complexities of swaps and desires for simplicity 
and discretion. 
 
4. (U) On March 29, local English-language daily "Arab Times" 
carried an AFP report which quoted 'industry sources' as 
saying that Jordan had secured 50,000 bpd from Saudi Arabia 
and 25,000 bpd from Kuwait to replace suspended Iraqi 
supplies.  The sources said that Jordan was paying 'full 
market prices' for the crude. 
 
5. (S) COMMENT: Necessity is the mother of invention. 
Hopefully, this will be the last U.S. midwifery of the deal, 
but we are not counting on that.  END COMMENT. 
JONES