Iran and Iraq signed an agreement on Sunday under which Iran will import Iraqi crude and send back refined products in return, the semi-official ILNA news agency said.
"A joint experts group will implement the contents of the agreement in one week," ILNA quoted Iranian Oil Minister Kazem Vaziri-Hamaneh as saying after signing the deal with his visiting Iraqi counterpart Hussain al-Shahristani.
Vaziri-Hamaneh said Iraq would supply up to 100,000 barrels per day (bpd) of crude to two refineries in Abadan and Kermanshah, both Iranian cities near the border with Iraq.
"In return, Iraq will receive two million litres of Iran's kerosene by road tankers," Vaziri-Hamaneh said.
It was not immediately clear if the kerosene sent to Iraq would be produced from the Iraqi crude. Iranian Oil Ministry officials could not be reached to comment.
The two neighbours had signed a preliminary agreement in 2005 to export 150,000 bpd of crude from the southern city of Basra to Abadan refinery through a twin pipeline. In return, Iran was to send gasoline, gas oil and kerosene to Iraq.
Sunday's ILNA report said the two countries were also considering co-operation on oil fields that straddle their border but it did not give details.
Iran's agreements with Iraq have been stalled by violence in Iraq and Washington's reservations about any energy or oil swap deals between the two neighbours, both members of the Organisation of the Petroleum Exporting Countries (OPEC).
Oil is Iraq's main source of the hard currency needed to rebuild its economy and Iraq urgently needs crude export revenues to fund reconstruction.
Washington accuses Iran of backing attacks against US troops in Iraq, funding anti-Israeli militia and seeking nuclear weapons. Tehran denies the charges.
Iran and Iraq, who fought each other to a standstill between 1980 and 1988, are using energy ties as a bridge to move towards a full rapprochement.
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