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Hezbollah-Brokered Iranian Fuel Arrives In Crisis-Hit Lebanon

Above Photo: Hezbollah flags flutter as a convoy of tanker trucks carrying Iranian fuel oil arrive at al-Ain village in northeastern Lebanon. Aziz Taher/Reuters.

The arrival of Iranian fuel arranged by Hezbollah has been received with mixed feelings in Lebanon amid an ongoing energy crisis.

Beirut, Lebanon – The first of several truck convoys carrying Iranian fuel has arrived in Lebanon from Syria, a Hezbollah spokesperson told Al Jazeera – a shipment intended to help ease crippling fuel shortages amid a dire economic crisis.

The first shipments of the fuel, carried by two convoys totalling 40 trucks according to Hezbollah’s Al Manar television channel, arrived in Lebanon on Thursday.

The fuel delivery has been portrayed by the Iran-linked Lebanese group as a huge boost to the cash-strapped country. However, the shipments violate United States sanctions imposed on Iranian oil sales and have gotten a mixed response in Lebanon.

The first of four Iranian fuel tankers docked in Syria’s Baniyas port earlier this week.

Oil export monitor Tanker Trackers says the four-tanker shipment contains a total of 33,000 metric tonnes of gasoil and would need 792 trucks to deliver the entire shipment to Lebanon, which is in desperate need of fuel.

Lebanon’s energy crisis is a result of an economic meltdown that has devastated the country since 2019. The value of the Lebanese pound has plummeted by about 90 percent and about three-quarters of the population lives in poverty.

Power cuts have plagued Lebanon for months. The state has struggled to provide more than a couple of hours of electricity per day, while families often struggle to afford the surging costs of private generators and to secure diesel fuel to run them.

Hospitals in Lebanon are in critical condition as they struggle to secure enough fuel to keep their lights on and equipment functioning.

Hezbollah Secretary-General Hassan Nasrallah said in a speech earlier this week that a month’s supply of the Iranian fuel would be donated to institutions such as public hospitals, the Lebanese Red Cross, Civil Defence forces, and orphanages.

Private hospitals, bakeries, factories that produce medicines, and other institutions can purchase the fuel at a low cost in Lebanese pounds. Nasrallah said they have not yet determined the price, but said it would be very affordable and not for profit.

Private generator distributor Kassem, who only provided his first name over safety concerns, told Al Jazeera his business is struggling to cover maintenance fees for generators and fuel costs, and that he is open to purchasing Iranian fuel from Hezbollah.

“We’re waiting to see how Amana will price it,” Kassem said, referring to the Hezbollah-affiliated company organising the distribution.

The US, which has designed Hezbollah as a “terrorist” organisation, has sanctioned Amana for its links to the party.

Though the Iranian fuel tanker did not dock in Beirut, Lebanon could risk facing sanctions given that the fuel was financed, transported, and distributed through US-sanctioned entities.

Neither Lebanese nor US officials have commented on Thursday’s delivery.

Kassem claims that his decision to buy the fuel is not political, but is out of desperation.

“We have no choice but to take whatever decision that reduces the burden on us and citizens,” Kassem said.

Head of Lebanon’s Doctors’ Syndicate, Charaf Abou-Charaf, says the shipments will not solve the problems underlying the crisis but could give people in Lebanon some breathing space.

“It definitely will reduce some of the pressure on hospitals and allow them to do their work a bit more smoothly,” Abou-Charaf told Al Jazeera.

“But I think the problem lies with lifting subsidies and securing hard currency so we could purchase fuel.”

Lebanon’s Central Bank announced in June that it would stop spending roughly $3bn annually on fuel subsidies. The announcement sent tremors through the economy and encouraged distributors to hoard their stock with the intention of selling at higher rates later.

The subsidies had allowed importers and distributors to sell fuel at an officially pegged rate of 1,500 Lebanese pounds to the US dollar. But as the value of the pound plummeted, the pegged rate was replaced by an informal rate in the wider market. Economists and analysts say keeping the subsidies ultimately incentivised smuggling, notably into Syria, to sell at a profit.

But experts have criticised Hezbollah’s fuel deal for its lack of transparency, and as another piecemeal solution to a structural crisis.

“These are all quick fixes to keep the power on, but they won’t solve the problems of the power sector,” independent energy policy consultant Jessica Obeid told Al Jazeera.

“The problem isn’t where we get fuel or electricity from, it’s how we’re going to pay for it.”

The Iranian fuel, she says, would not be a game-changer in terms of meeting surging demand and it is calculated to improve Hezbollah’s popularity.

“It’s political [points] scoring,” she said.

Obeid said that if the authorities need to focus on restructuring its energy sector – one of the most ineffective and costly of Lebanon’s haemorrhaging institutions due to expensive subsidies and a bloated workforce critics say is part of Lebanese parties’ political clientelism networks.

“You cannot have a thriving economy if you’re paying a hefty electricity bill,” Obeid said, adding that officials have not focused on technical solutions when drafting policy, but simply on “power and vested interests”.

“But the longer this lingers, the greater the cost the Lebanese people will pay.”

‘Everyone Is Suffering’

Last week, Lebanon finally formed a new government after 13 months of political bickering and sectarian horse-trading. Prime Minister Najib Mikati and ministers have prioritised resolving the country’s fuel crisis, but there is no clear timeline on when or how that will happen.

Hezbollah’s fuel has arrived before the government could deliver a shipment agreed with Iraq.

On Sunday, then-caretaker Energy Minister Raymond Ghajar announced the first shipment of Iraqi fuel was set to arrive sometime this week, which would allow the government to provide several additional hours of state electricity every day.

The Lebanese-Iraqi deal is an opaque barter where Iraq would provide high-sulphur fuel oil in exchange for goods and services. But because high-sulphur fuel oil is not compatible with the country’s power plants, the Lebanese government selected Dubai’s ENOC in a tender to swap the shipment with compatible fuel.

In the meantime, the Iranian shipment has left others in a dilemma, including Dr Georges Juvelekian of Beirut’s Saint George Hospital.

Private hospitals have yet to take a stance on whether they would purchase Iranian fuel from Hezbollah, fearing that they may possibly violate sanctions, be beholden to Hezbollah, or even lose the trust of clientele.

“Patient care comes first, and as doctors, we need to prioritise our ability to care for them,” Juvelekian told Al Jazeera.

“But at the end of the day, there are no replacements for good governance. And, by the way, everyone in Lebanon is suffering, regardless of their affiliation.”

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