Lebanon halts Iraqi fuel imports over $1B+ debt

Shafaq News – Beirut / Baghdad

Lebanon has stopped purchasing fuel oil from Iraq due to accumulating debts, Lebanese Energy Minister Joe Saddi said on Sunday.

Saddi told reporters that Lebanon had relied on Iraqi fuel for four consecutive decades, noting that Iraq had provided significant support. He pointed out that the most recent contract added a new debt of around $1.2 billion, making it no longer feasible to continue the arrangement.

According to the minister, Lebanon has signed a new agreement with Kuwait to supply fuel, under which two shipments will be provided as donations and two at market price — effectively at half cost — to be paid from the revenues of Electricite du Liban (EDL). The country’s current power production capacity, he noted, ranges between eight to ten hours per day based on output from existing plants.

Iraq and Lebanon had previously agreed on an energy-for-services mechanism under which Baghdad supplied heavy fuel oil to help Beirut manage its worst economic crisis, in exchange for goods and services provided to Iraq.

Earlier this year, Beirut and Baghdad renewed their oil agreement — shifting from fuel oil to crude — despite Iraq’s frustration over unpaid dues, with Iraqi supplies viewed as a lifeline to keep Lebanon’s power plants running and reduce reliance on the black market.

Fuel oil — a heavy petroleum derivative produced through crude-oil refining — is commonly used to power electricity plants, ships, and industrial boilers.