BAGHDAD — Iraq signed an agreement with Lebanon on Saturday, allowing the payment for 1 million tons of heavy fuel oil a year in goods and services, helping the cash-strapped country to ease its acute power shortage.

A statement issued by the Iraqi Prime Minister's office on Saturday said that the Iraqi Prime Minister Mustafa Al-Kadhimi monitored the deal that was signed by Iraqi Finance Minister Ali Allawi and Lebanese Minister of Energy and water Raymon Ghajar.

The Lebanese minister after his return to Beirut said that the fuel would be used for electricity generation and was enough for four months. He said it was worth about $300 million to $400 million.

Meanwhile, the Iraqi oil ministry said in a statement it would supply Lebanon with surplus heavy fuel oil from its refineries.

No further information was revealed about the agreement, such as the launching date or the mechanism of transferring fuel to Lebanon.

The statement did not clarify the nature of services and goods that will be paid for the value of the oil sold. — Agencies