Cash-strapped Egypt is close to finalizing an agreement to import 600,000 barrels of crude from OPEC-member Libya in May on credit, in a move that could offer relief from fuel shortages that have recently afflicted the Egyptian economy, officials from the two countries said Thursday.

"Negotiations are going well, and we are in the final stages of reaching an agreement with Libya to receive 600,000 barrels of oil, most likely via Alexandria port," an Egyptian official told Dow Jones Newswires. " Egypt will likely pay international prices for the oil on credit of up to 90 days and Libya has told us it can up the amount of oil later to 1 million barrels per day."

A Libyan official familiar with the matter confirmed talks to sell oil to Egypt were at an advanced stage--with a shipment of 600,000 barrels next month as an option--and the length of the credit was the main point to be finalized. The official confirmed the sale would be at international prices and it could take another one or two months before any delivery takes place. Last month, Libyan Deputy Oil Minister Omar Shakmak said the North African country was in talks to supply 1 million barrels of oil a month to Egypt on credit, which could meet about 5% of Egyptian oil needs.

The move comes as Egypt has been facing a slowdown in oil and gas exploration activities over the past couple of years as a result of the continuing unrest since the ousting of former President Hosni Mubarak. The country has been paying hefty premiums for its crude supplies due to the weaker Egyptian pound and difficulties in securing letters of credit for its transactions, while a shortage of state-subsidized diesel has already paralyzed transportation in many parts of the country.

The Libyan deal also follows a promise from Cairo to hand over a prominent supporter of former dictator Moammar Gadhafi to Tripoli , prompting allegations from Libyan activists that the North African nation is using its oil wealth to gain political leverage.

The civil unrest has also led to a risky economic mix of dwindling foreign-exchange reserves, declining tourism revenue and costly price subsidies, economists said. To prop up the Egyptian currency, the central bank has gone through nearly two-thirds of its foreign-currency reserves, pushing the country to the brink of a liquidity crisis.

Egypt is in the throes of trying to secure a $4.8 billion loan from the International Monetary Fund, a move viewed as critical to rescuing its economy and mending its reputation as a place to do business.

People close to the talks say the IMF wants to see Egypt reduce its subsidy spending as part of a reform plan for the loan. But any subsidy changes will probably only further enrage the legions of poor who rely daily on cheap fuel, making the already uncomfortable summer months all that more unbearable.

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