On Tuesday, Walid Fayyad, Lebanon’s Energy Minister, announced that Iraq has agreed to increase the amount of heavy fuel oil exported annually to Lebanon by 50%, resulting in a total of 1.5 million metric tons.
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In his official declaration, Fayyad stated that Iraq has agreed to ensuring the entirety of Lebanon's demands for oil-derived products in order to facilitate the operation of power plants and guarantee an augmented supply of power throughout summer.
Furthermore, Iraq also agreed to provide Lebanon with a total of 2 million metric tons of crude on an annual basis.
According to the minister, Lebanon received payment facilities for this deal for six months from the date of receipt "without incurring any financial interests and at a price that takes competitive international prices into account," said the minister.
According to an agreement of both parties, since July 2021, Lebanon has procured heavy fuel oil from Iraq to generate electricity for power plants in order to ensure a consistent daily supply of power lasting approximately four hours.
As per the agreement, Iraq provided the Lebanese government with fuel in a reciprocal arrangement for healthcare provisions aimed at Iraqi citizens. Lebanon subsequently exchanges its stock of high-density fuel oil with gas oil, which is compatible with its power generation facilities.
Lebanon is currently grappling with an unparalleled economic crisis, which is exacerbated by a shortage of overseas reserves required for procuring gas oil to power its electricity production facilities, resulting in power rationing of roughly 20 hours per day; consequently, the majority of the population is dependent on alternative sources of energy, such as private generators and solar power.