Lebanese government extends oil import agreement with Iraq
The Lebanese government has given its nod to the Ministry of Energy and Water’s request to renew a crucial agreement with Iraq. This agreement revolves around the supply of 1.5 million tons of oil to Lebanon’s state electricity company.
This ongoing arrangement can be traced back to a Lebanese-Iraqi agreement initially inked in 2021. Originally, Iraq had pledged to provide specified quantities of fuel oil to the Lebanese government in exchange for unspecified Lebanese services. However, due to the unsuitability of high-sulfur Iraqi fuel oil for Lebanese power plants, these initial shipments were replaced by imports from alternative suppliers.
Earlier this year, the agreement underwent expansion to incorporate Iraqi oil once again, with the provision that it would be exchanged for various products. Despite these efforts, it appears that the Iraqi-Lebanese agreement has not effectively resolved Lebanon’s struggle to secure consistent and adequate fuel supplies.
Notably, fuel oil imports had been on a decline even before the agreement’s inception, but the situation worsened in the latter half of 2021, ultimately grinding to a halt at the onset of 2022.