Iraq-Iran fuel oil barter deal pays down debt backlog
Iraq has been transferring large volumes of high-sulfur fuel oil to Iranian traders in a deal to help resolve energy import debts.
Ihsan Al-Awadi, Chief of Staff to the Iraqi Prime Minister (right) and Mohammad Kazem Al Sadeq, Iranian Ambassador to Iraq, sign an agreement to swap Iraqi oil for Iranian gas supplies on July 11, 2023. (Iraqi Prime Minister's Media Office)
Iraq has been transferring up to 190,000 barrels per day (bpd) of straight-run high sulfur heavy fuel oil (HSFO) to traders nominated by Iran, two senior Iraqi Oil Ministry officials familiar with the trade said, implementing a state-to-state barter agreement to pay down its energy import debt to Tehran.
The government is using this mechanism “because Iraq cannot pay these dues to Iran with cash, due to sanctions on Iran,” one of the senior Oil Ministry officials said.
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