In a recent report, Iraq-based energy researcher Noam Raydan highlighted the mystery surrounding fuel oil talks between Lebanon and Iraq.
“Lebanese officials continue to experiment with ad hoc solutions to the power sector, which has long been a drag on the national budget,” she stated about Lebanon’s continuous attempts to secure fuel from Iraq.
Fuel that it can’t use
The most controversial part of all this is that even though Iraqi fuel oil was proven unsuitable for local power plants, Lebanon’s government is still trying to import it for power generation.
The talks started in July last year when Iraq agreed to export surplus petroleum products, especially crude oil, to Lebanon, in exchange for industrial and agricultural products from Lebanon.
Raydan, who is a contributing writer at Forbes and has written for the Wall Street Journal and the Financial Times, points out that “Iraqi fuel oil is not suitable for operating the main power plants in Lebanon that run on heavy fuel oil (HFO), namely in Zouk and Jiyeh.”
Additionally, she reports that crude oil cannot be used for power generation as Lebanon lacks the refining capabilities.
Speaking to The961, a local engineer explained that fuel oil from Iraq may instead be used in local factories rather than power stations, but this has not been brought into the subject by officials.
Environmental problems
In an article for Energy Fuse, Raydan noted that Lebanon’s effort to import Iraq‘s high sulfur fuel oil (HSFO) goes against its own laws put in place to protect air quality in Lebanon.
“The potential technical and environmental problems that could arise from using unsuitable fuel oil at the power plants did not stop the two sides from engaging in talks,” she said.
Bump in the road
Earlier this month, Lebanon inked a deal with Iraq to secure 500,000 tons of fuel annually in exchange for medical expertise. Caretaker Prime Minister Hassan Diab was supposed to visit Iraq to make the deal official but local media soon reported that the meeting was “postponed.”
At the moment, the fuel oil talks linger in fermata as Lebanon’s electricity supply keeps getting worse.
Smuggling problems
It is unclear why Lebanon is persistent on Iraqi fuel oil when it is deemed useless to the local power sector. But the answer could lie in evidence that subsidized fuel is often being smuggled to Syria.
Last week, caretaker Energy Minister Raymond Ghajar highlighted the problem of fuel smuggling to Syria noting that it was the cause of Lebanon’s gasoline crisis.
On various occasions, Lebanese citizens had caught and intercepted dozens of trucks loaded with fuel to Syria.
In a recent interview with France 24, a cleric close to Hezbollah stated that smuggling was an “integral part the resistance’s operations to defend Lebanese interests.”
While officials are publicly acknowledging the smuggling issue, the Lebanese state does not seem to have the will or desire to make it stop.
