Iraqi oil to Lebanon... for what?

[size=52]Iraqi oil to Lebanon... for what?[/size]

[size=45]In light of the fuel and electric energy crisis plaguing Lebanon, the Iraqi and Lebanese parties signed a new agreement to sell Lebanon one million tons of oil annually. Iraqi economists see the agreement as a “moral duty” from Iraq towards Lebanon, while others warn against using the language of public discourse to express their suspicion of what is behind this agreement, as, according to observers of the file, “a vague agreement that serves parties at the expense of other parties suffering from mismanagement in Lebanon and will put The latter is in a cycle of unrepayable debt.[/size]
[size=45]The General Coordinator of the Iraqi Economists Network, Bariq Shubra, simplifies this agreement by saying that it “has a commercial nature that guarantees the economic interests of the two countries, as black oil is bartered for goods and services.” The Lebanese economy, according to Shuber, “has highly qualified human resources and production and service capacities in various sectors that can be stimulated by promoting foreign trade with Iraq, which will benefit the economies of both countries.” He added: "In the long run, Lebanon was and still has an economic and geo-political importance to Iraq, almost comparable to the importance of the countries of the new economic alliance between Iraq, Jordan and Egypt, regardless of the current political conditions."[/size]
[size=45]Agreement details[/size]
[size=45]The agreement includes the sale of one million tons of heavy fuel oil to Lebanon annually, according to the price approved by the Iraqi Oil Marketing Company SOMO in the month of loading the shipment. However, there is a discussion about how Lebanon can benefit from this type of oil, especially since it is not suitable for power plants in Lebanon, which requires refining it or replacing it with a third party in order to change the specifications to become suitable for Lebanese use. Under the agreement, the Iraqi Ministry of Finance authorizes the Central Bank of Iraq to open and manage a bank account with the Banque du Liban in US dollars for the purposes of the agreement exclusively.[/size]
[size=45]Heavy fuel oil will also be supplied after opening a documentary credit, in the name of one of the Lebanese government agencies or the Electricité du Liban, through the Bank of Lebanon in favor of the Central Bank of Iraq on behalf of the Iraqi Oil Marketing Company, to supply one million tons of that material according to the deferred payment mechanism after one year From the date of accepting the shipping documents so that the full value of the documents is paid into the account of the Central Bank of Iraq opened with the Banque du Liban.[/size]
[size=45]Also, “the balance of the Central Bank of Iraq with the Bank of Lebanon will be transferred to a bank deposit for a period of one year, which will be automatically renewed by agreement of the two parties, and the interest on the balance will be accrued according to what is in effect with the Bank of Lebanon,” as indicated by sources familiar with the signed agreement.[/size]
[size=45]The Iraqi side will exclusively use the account balance in whole or in part according to the mechanism that will be agreed upon with the Lebanese side for the purpose of purchasing goods and services for the benefit of the Iraqi ministries and institutions, provided that the Bank of Lebanon ensures that the Lebanese authorities that provide services to the Iraqi side receive their dues using payment orders or cash in the local currency (lira). Lebanese) upon request, and from the balance accumulated in the account of the Central Bank of Iraq opened for the purpose of implementing this agreement with the Bank of Lebanon, and according to the price of the “exchange” platform or the parallel market price approved by the Bank of Lebanon.[/size]
[size=45]Iraq needs the expertise of Lebanese trade and economic experts in building advanced trade and economic zones and encouraging joint companies between the two countries, with an interest in enhancing the agricultural and food security of the two countries.[/size]
[size=45]The sources refer to another point, which is the exemption of the Central Bank of Iraq account from any taxes imposed or that may be imposed on bank accounts in the Lebanese Republic.[/size]
[size=45]The researcher in financial and development affairs, Aqil Al-Muhammadawi, determines in official figures the volume of trade exchange between Iraq and Lebanon, its prosperity in some years and its decline in others. "The trade exchange between Iraq and Lebanon rose from rank 11 on the list of the most important Lebanese export markets in 1999 to rank first in 2004 and accounted for about 14.6 percent of the total Lebanese exports," according to al-Muhammadawi.[/size]
[size=45]The researcher added that this trade exchange “regressed to the fifth rank in 2019 and accounted for 4 percent of the total Lebanese exports.”[/size]
[size=45]Al-Muhammadawi reveals that the value of Lebanese exports to Iraq decreased from a record amount of 272.3 million dollars achieved in 2013 to 146.2 million dollars in 2019, a decrease of 46.3 percent; The value of Lebanese imports from Iraq also decreased from a record amount achieved in 2008 of 14.3 million dollars to 4.1 million dollars in 2019, a decrease of 71.3 percent.[/size]
[size=45]According to al-Muhammadawi, Iraq needs the expertise of Lebanese trade and economic experts in building advanced trade and economic zones and encouraging joint companies between the two countries, with an interest in enhancing agricultural and food security for the two countries.[/size]
[size=45]what is the opposite?[/size]
[size=45]The economic academic at the University of Basra, Dr. Nabil Al-Marsoumi, asked in a post on his Facebook account about Lebanon's ability to pay the huge sums of money incurred from the oil deal. He reviewed the prices that SOMO sold heavy fuel oil (black oil) in May 2021, where the price of one ton of heavy fuel oil reached approximately $395, meaning that the price of one million tons that Iraq would export annually equals $395 million. Can Lebanon pay these huge sums in light of its economic crisis?[/size]
[size=45]Economic researcher Evan Shaker Al-Doberdani says, in an attempt to answer Al-Marsawy’s question, that “Lebanon does not have industry, minerals and primary resources like other countries in the region and relies only on remittances from expatriates and tourism to enter hard currency”; For this reason, the economic researcher finds it very difficult to implement this agreement by Lebanon, and that the balance of interest tends to Lebanon more than Iraq.[/size]
[size=45]Al-Dobardani believes that the agreement “has a political character more than its economic character, as the agreement is very similar to Canada’s agreement with European countries to export oil in exchange for technological services, but Canada deals with producing and developed countries and Iraq is dealing with a collapsed country in terms of economy and currency and does not have any Something you manufacture and export for one million tons per year of black oil.”[/size]
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