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