The Iraqi Council of Ministers approved increasing its annual crude oil supply for Lebanon from 500 thousand tons to 1 million tons, according to a statement from the Lebanese Prime Ministry on Wednesday.
The council voted unanimously to support Lebanon with crude oil, promising that the decision would be implemented as quickly as possible since Lebanon urgently needs support. However, details on how the supply will take place have not yet been provided.
Lebanon had announced on Jan. 14 that it reached an agreement with Iraq to start fuel imports from Baghdad in 2021, based on international prices.
Iraq's oil support decision to provide 500 thousand tons to Lebanon was first agreed upon during a visit in February to the country by Lebanese caretaker Energy Minister Raymond Ghajar.
In late February, he warned that electricity supply was becoming critical and the crisis-stricken country could be plunged into total darkness by the end of June.
It is estimated that 1 million tons of crude oil are sufficient to meet half of Lebanon's annual needs.
The economic crisis in Lebanon has deepened since 2011 when the growth rate saw a dramatic drop to just 1.5% from 9% between 2007 and 2010. Public debt as of June 2020 also saw an unprecedented increase to $94 billion, exceeding 150% of GDP, to become one of the highest debt rates in the world, according to the Ministry of Finance.
Lebanon is trying to alleviate the energy crisis at a time of economic fallout from the pandemic and in the aftermath of the Beirut explosion on Aug. 4 last year when a large amount of ammonium nitrate stored at the port of the city exploded, causing at least 204 deaths and $15 billion in property damage.
Over the last 10 years, Lebanon has lost $40 billion through waste and inefficiency in the electricity sector. The country imports $5 billion worth of gasoline and diesel annually to cover demand from 8,000 private generators.
By Busranur Begcecanli