HTTP Error 500.19 - Error 0x8007000d on an Azure VM

I'm getting this error when I'm trying to run my .NET core 3.1 website on IIS at an Azure Virutal Machine. The project is published on to the VM by Visual Studio publishing wizard.

Here is the web.config:

<?xml version="1.0" encoding="utf-8"?>
<configuration>
  <location path="." inheritInChildApplications="false">
    <system.webServer>
      <handlers>
        <add name="aspNetCore" path="*" verb="*" modules="AspNetCoreModuleV2" resourceType="Unspecified" />
      </handlers>
      <aspNetCore processPath="dotnet" arguments=".\ReportingPortal_Backend.dll" stdoutLogEnabled="true" stdoutLogFile=".\logs\stdout" hostingModel="inprocess" />
    </system.webServer>
  </location>
</configuration>
<!--ProjectGuid: 0ec386eb-7f3c-4baa-b884-73415b1602b7-->

I've tried with stdoutLogEnabled="false". Even with true on it still doesn't write the log files for me. What could be the issue?