• 3 minutes Tesla is the Most American Made Car!
  • 7 minutes Should the US government be on the hook for $15 billion?
  • 9 minutes California breaks 1 GW energy storage milestone
  • 16 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours U.S. Presidential Elections Status - Electoral Votes
  • 36 mins Severe Drought in the West Will Greatly Reduce Electrical Production from Hydroelectric Turbines.
  • 1 day The Climate Scare Stories Began With Far Left Ideology Per GreenPeace Co-Founder
  • 3 days NordStream2
  • 3 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)
Global Risk Insights

Global Risk Insights

GlobalRiskInsights.com provides the web’s best political risk analysis for businesses and investors. Our contributors are some of the brightest minds in economics, politics, finance, and…

More Info

Premium Content

Lebanon On The Brink As Fuel And Electricity Shortages Grip The Country

On the last day of the month, armed protesters took to the streets of Tripoli. They were outraged by the power outages and the story of a child on life support who died due to the failure of the hospital’s backup generator. The protesters fired their guns in the air and threw stones at soldiers until the Lebanese army was deployed to contain the situation. Protesters then stormed the building of the Kadisha Electricity Company, and forced its employees to redirect electricity supplies. Whilst this was happening, the military also had to respond to eight roadblocks in different locations around the country and an armed dispute over the long queue at a petrol station in Deir al-Zahrani, resulting in the injury of 12 people.

Fighting over fuel

 Since the beginning of May, many petrol stations have continued to close, with those remaining having put in place fuel limits, as low as LBP 20,000 worth of petrol. Road congestion is not only attributable to the aforementioned roadblocks, but also the immensely long queues at petrol stations, which have forced people to queue overnight. Alarmingly, the shortage of fuel is now linked to daily reports of shooting and fights over whose turn it is to fill up their tank.   Over June, even private generators have been rationed due to the lack of diesel fuel, with 4 hours/day of electricity suspended. The smuggling of subsidized goods from Lebanon to Syria, which is already reportedly costing the Lebanese economy USD 15 million per day, is a large contributor to these shortages. Attempts to curb smuggling have led to gunfights between the military and heavily armed smugglers such as in Ras Baalbek on the 12th June.

Escalation between protesters and security forces

The failure of political leaders to resolve these issues has pushed the people to target the political class directly. During the last week of June, protesters tried to break into the homes of Representative Faisal Karami and MP Muhammad Kabara in Tripoli. In Beirut, protesters were also stopped by security forces after reaching the door of Raoul Nehme’s house, the Minister of Economy and Trade in the caretaker government. 

Related: U.S. Rig Count Rises In Volatile Week For Oil

Seen as symbols of the country’s fiscal deterioration, the banks have also been targeted. The Association of Banks in Lebanon went on a countrywide shutdown on June 30, following an attack against the staff of the Lebanese Swiss Bank’s headquarters in Beirut. This came after the Lebanese Lira exchange rate plummeted to LBP 18,000/USD, on June 28, a loss of 90% of its value to the Dollar. According to the Lebanese Swiss Bank, about a hundred men broke into its headquarters. In Tripoli and Sidon protesters also tried to storm branches of the central bank only to be pushed back by security. 

A deteriorating military

The military is stretched dangerously thin, having to protect Lebanon’s despised politicians and banks, diffusing fights at petrol stations and clamping down on smuggling. The leadership is worried that it will no longer be able to deploy in the necessary areas because its soldiers haven’t received wages. As a result, the soldiers also suffer – alongside their people – from the deteriorating socio-economic conditions

A few weeks ago, the extent of the problem was exemplified by the agreement of 20 nations to provide emergency aid to the ailing Lebanese military. This consisted of basic supplies such as milk, flour, medicine and fuel. The United States remains the biggest financial backer of the Lebanese military. This year it has increased funding from $15 million a year to $120 million. However, this still falls dramatically short of the aid needed. 

 As the situation becomes more violent in the country, Hezbollah may seek to enforce law and order itself.  For the time being, however, Nasrallah stated in his speech on Friday, June 25, that Hezbollah supports the bolstering of the Lebanese military in its job to secure the country. If the “resistance” paramilitary group were to step in for the military – possibly the only respected institution in Lebanon – it would most likely provoke violent sectarian sentiment and uproar amongst the international community. 

The military, nevertheless, endeavors to persevere. A few days ago, they resorted to offering helicopter rides at USD 150 to help pay the salaries of its soldiers – many of whom are currently on food rations and struggling to afford transport to locations where they are meant to be stationed. Often soldiers can be seen taking public buses, the cheapest and often ridiculed option in Lebanon. 

Looking ahead

From fighting over food in Bab al-Tabbaneh & Jabal Mohsen neighborhoods of Tripoli to the incursion of militants in Arsal, the military’s ability to protect Lebanon’s borders, let alone to ease internal strife, is decreasing day-by-day.

The country’s population, which includes civilians with high levels of weapon ownership, a plethora of militant groups, and warlords from the days of the civil war, could further erupt into violence as actors compete for influence and control of the dwindling resources. Currently, political actors in Palestinian refugee camps, for example, such as Fatah and Palestinian Islamic Jihad in the Rashidieh camp, still have the authority as power brokers and peacekeepers. That said, any shortage of aid, such as the United Nations Relief and Works Agency (UNRWA), could tip the scales as desperation stirs violence. The same balance could also be tipped in the wider population with now more than half living below the poverty line, and with no end to the crisis in sight, further instability is to be expected throughout July and August.

By Global Risk Insights

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on July 11 2021 said:
    Lebanon, one of the most beautiful countries in the world and a population considered as among the most gifted and educated in the world are sadly the victims of a corrupt confessional system and a governing class which are rotten to the core.

    Those Lebanese who left Lebanon more than two hundred years ago and still do till now to start a new life in the United States, Europe, South America and the Arab Gulf region have made a great success of their life and excelled in all walks of life from academia to business, medicine and computers to name but a few.

    William M. Thompson, an American missionary wrote a book titled:” The Land & the Book” in which he described what he saw when he lived in Lebanon in 1870. The following excerpts describe what he observed at that time.

    “Lebanon has about 400,000 inhabitants, gathered into more than six hundred towns, villages and hamlets. The people and sects live together and practice their religions in close proximity but they do not coalesce into one homogeneous community, nor do they regard each other with fraternal feelings. The Sunnites excommunicate the Shiites – both hate the Druze, and all three detest the Christians. The Maronites have no particular love for anybody and, in turn, are disliked by all. The Greeks can’t endure the Greek Catholics; all despise the Jews.

    And the same remarks apply to the minor divisions of this land. There is no common bond of union. Society has no continuous strata underlying it, which can be opened and worked for the general benefit of all.

    No other country in the world, I presume, has such multiplicity of antagonistic races; and herein lies the greatest obstacle to any general and permanent amelioration and improvement of their condition, character and prospects. They can never form one united people, never combine for any important religious or political purpose; and will therefore remain weak, incapable of self-government and exposed to invasions and oppressions of foreigners. Thus it has been, is now, and must long continue to be a people divided, meted out and trodden down.”

    What William M Thompson saw in 1870 still pervades the country in 2021.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Doolittle on July 11 2021 said:
    Meanwhile next door Israel is swimming in ahem *ALL THE MONEY IN THE WORLD!* ahem...just like all of Russia, all of Mexico, all the Caribbean, all of Venezuela, all of Great Britain, all of China, all of Japan, all of Canada.

    And of course all of the USA as well! Yesirreee one can feel all the South Carolina gold mines just pouring forth their product upon the World!

    Well that would include every US State East of the Mississippi River but of course! And so true of every State West of the Mississippi as well! And of course when I think of "where does food come from?" my first answer ever and always true is "from Washington DC" same as from whence our collective love for Law, Justice and procedure pours forth absolutely and of course!

    Yep nothing succeeds like excess beyond even the idea of measure all the time, every time...In Our Facie to use a Latin word.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News