In mid-September last year, the first shipments of Iraqi fuel reached Lebanon, stemming from a swap agreement signed with Iraq at the end of July. The UAE National Oil Company won the tender for the replacement executed by the Lebanese Ministry of Energy, which the Iraqi authorities approved. This agreement involved exchanging approximately 84,000 tons of Iraqi crude oil for about 30,000 tons of heavy fuel and around 33,000 tons of gas, after deducting transportation costs, which are paid from the total Iraqi oil.
However, with the arrival of the second and third shipments at the beginning of October and November, it became evident that neither exceeded 60,000 tons, indicating a decrease of about 20,000 tons. The total agreement stipulates the supply of one million tons over a year, distributed over 12 months, which has raised costs for Lebanon, as they are tied to the transported quantity, paid to the swapping company. This cost is also deducted from the total monthly quantity delivered, leading to an additional drop in the total amount supplied to Electricité du Liban.
Consequently, Prime Minister Najib Mikati revisited the issue with his Iraqi counterpart Mustafa Al-Kadhimi, aiming to re-establish the previously agreed quantity. Iraqi authorities promised once again to increase the quantity to between 75,000 and 80,000 tons. With the Ministry of Energy ceasing energy purchases for Electricité du Liban, Lebanon has become entirely dependent on Iraqi fuel, with the last shipment expected in August to provide two hours of electricity for Lebanese areas, where each shipment typically lasts between twenty and thirty days based on energy consumption patterns.
According to "Nidaa Al-Watan," Lebanese citizens are set to face a complete blackout in the middle of summer, as agreements with Jordan to supply electricity and with Egypt for gas are dangling on the American exceptions to the Caesar Act. Unless Lebanon successfully persuades the Iraqis to extend the contract, as several Lebanese officials have previously confirmed, communication with Iraqi authorities will be sought for a one-year extension, which in turn requires American approval, as observers point out. The American administration does not appear urgent to lift the "energy blockade" on Lebanon, either from the Jordanian or Egyptian side. Recently, Barbara Leaf, U.S. Assistant Secretary of State for Near Eastern Affairs, stated that "the energy sector in Lebanon is on the brink of collapse." She also noted that "the United States has not yet made any decision to lift sanctions or any exceptions regarding the sanctions on Syria concerning the transfer of Egyptian gas to Lebanon, as no contracts have been signed by these countries yet."
Meanwhile, Minister of Energy and Water in the caretaker government, Walid Fayad, proposed an emergency electricity plan, citing delays in financing Egyptian gas and Jordanian electricity. This plan calls for financing the needed fuel through the Central Bank and the Ministry of Finance to secure electricity for about ten hours a day through Electricité du Liban, simultaneously increasing tariffs for citizens to cover operational and fuel costs. However, there are numerous obstacles to this plan, the most significant being the non-technical waste estimated at around 40%, while the refusal to pay bills is estimated at about 10%. If tariffs are raised, these figures are likely to double.
