KUWAITI PAPER REPORTS DEAL ON OIF JET FUEL

C O N F I D E N T I A L KUWAIT 002464 SIPDIS E.O. 12958: DECL: 06/05/2015 TAGS: MOPS EPET PREL EAID MARR PGOV IZ KU SUBJECT: KUWAITI PAPER REPORTS DEAL ON OIF JET FUEL Classified By: Ambassador Richard LeBaron, Reasons 1.4(a) and (d) ¶1. (U) On June 5, local Arabic daily newspaper Al-Qabas ran a short, front-page piece saying that Kuwait has agreed to supply the U.S. with reduced-price jet fuel for operations in Iraq (full text in para 2). Under the terms of the deal, the story said, Kuwait would provide jet fuel for $24/ton rather than $70/ton, reducing the U.S.'s total jet fuel bill to $600 million (from $1.75 billion). (Note. The actual arrangement is denominated in barrels, not tons. End Note.) ¶2. (U) BEGIN TEXT OF ARTICLE. Al-Qabas, June 5, 2005. Al-Qabas has learned that a proposed settlement between Kuwait and the U.S. was concluded to reduce the price of fighter jet fuel from $70 to $24/ton (sic). The sources confirmed that the amount due will be $600 million instead of $1.75 billion. It is well known that Kuwait supplies the U.S. army with fuel in general, and with jet fuel in particular during Iraq operations. END TEXT. ¶3. (C) COMMENT. This is the first public reference to discounted fuel for OIF operations that we have seen. The topic may have come up as part of recent budget proceedings in the National Assembly. Several times over the last few weeks, GOK officials have expressed to us privately their relief that this issue has been "resolved" successfully. They are unaware of continuing deliberations in Washington about what constitutes fuel for OIF versus fuel used under the Kuwait DCA. The article cited above confirms that the GOK is keeping track of fuel used for OIF, in anticipation of finalizing a contract. ¶4. (U) Baghdad minimize considered. LEBARON