Iraq has agreed to sell Lebanon 1 million mt/year of heavy fuel oil in return for "goods and services" in a barter deal that should help OPEC's second-biggest producer reduce a surplus of fuel oil while enabling cash-strapped Lebanon to obtain the commodity needed for power plants.
The fuel oil will be sold at international prices and will be paid in exchange for Lebanese goods and services, Iraq's oil ministry said in a July 24 statement. Because Iraq's fuel oil doesn't meet specifications of its power plants, Lebanon will resell the Iraqi fuel and use the proceeds to buy spot cargoes of fuel that does meet its specifications, Lebanon's outgoing energy and water minister Raymond Ghajar said in a press conference on July 24, state-run National News Agency reported.
One million mt/year of fuel would meet around a third of Lebanon's needs, he said.
Cash-strapped Lebanon is suffering from severe power outages due to the financial crisis gripping the country, which relies on imported oil products for electricity generation.
Cash differentials for jet fuel barges trading in ARA reached 17-month highs mid-July. At the same time, the European Commission announced sweeping proposals to make flying greener, including a future tax on jet fuel. How far is the jet market from a complete recovery from the COVID-19 pandemic and what will the EC's "Fit for 55" plan mean for the aviation sector and the jet fuel market?
In this episode of the Oil Markets Podcast, S&P Global Platts senior jet fuel editor Virginie Malicier and middle distillates editor Christopher Ewen discuss with Gary Clark the latest dynamics in the European jet fuel market and the potential impact of the EU Green Deal on future jet demand.