Lebanon signs fuel deal with Iraq to ease economic and energy crisis

Lebanon will pay for 1 million tons of fuel oil a year in goods and services, helping to ease its power shortage, according to the new deal.

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Iraq has signed an energy agreement with Lebanon permitting the financially damaged government of the Levant country to pay for 1 million tons of hefty fuel oil a year in goods and services, serving Lebanon to slightly ease its severe power scarcity, the two sides expressed on Saturday.

Iraqi Finance Minister Ali Allawi and Lebanese caretaker Energy Minister Raymond Ghajar co-signed the agreement in the presence of Iraqi Prime Minister Mustafa al-Kadhimi. Lebanese officials have said that the Iraqi supplies will ease the situation in the country. Ghajar, speaking on his return to Beirut after signing the deal, said the fuel would be used for electricity generation and was enough to sustain energy demands for four months. The caretaker minister also stated that the deal was worth about $300 million to $400 million.

Elsewhere, Iraq’s Oil Ministry said in a statement that it would supply Lebanon with surplus heavy fuel oil from its refineries.

Lebanon is currently on the verge of an economic collapse threatening its socio-political stability. The country’s foreign reserves have been gradually dwindling and it faces a mounting demand for fuel, medicine, and other basic goods. Most Lebanese citizens face power cuts for many hours a day.

The country, which has struggled to meet electricity demands, has been forced to impose increasingly long power cuts across the country due to an increasingly low amount of energy supplies. The crisis, which erupted in late 2019, has been described as the country’s most severe since the end of a 15-year civil war in 1990.

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