Iraq signs deal with Lebanon to give Beirut 1mn tons fuel oil in exchange for medical services
Iraq has reached a deal with cash-strapped Lebanon to provide it with one million tons of fuel oil in exchange for receiving medical services, helping the small Mediterranean country ease its acute power shortage.
On Saturday, Lebanese caretaker Energy Minister Raymond Ghajar and Iraq's Finance Minister Ali Allawi in capital Baghdad signed a deal, according which Iraq will give one million tons of heavy oil to Lebanon in exchange for “goods and services”, said a statement by Iraqi authorities.
Ghajar said the deal would allow “the purchase of one million tons of Iraqi state fuel oil on behalf of Electricite du Liban (EDL)”, which is Lebanon's main electricity producer, over the course of a year.
He added that the deal would cover a third of EDL's fuel needs, however, he expressed hope that EDL could provide “up to nine or 10 hours of electricity (daily) over four months.”
In exchange, Lebanon would provide “services and assistance to Iraq in the hospitals sector”, Ghajar further said.
According to the Lebanese minister, the fuel would be used for electricity generation and would be enough for four months. He also noted that it was worth about $300 million to $400 million.
However, Ghajar said that Lebanon's power stations cannot directly use the Iraqi oil, so Beirut has to purchase compatible fuel from other providers which will receive the Iraqi oil in exchange.
Separately, Iraq's Oil Ministry said in a statement that it would supply Lebanon with surplus heavy fuel oil from its refineries.
Lebanon plunged into a political vacuum in August 2020, when the previous administration, led by then Prime Minister Hassan Diab, resigned following a devastating explosion at the port in Beirut that destroyed swathes of the capital and left more than 200 people dead.