Key Takeaways:
- Due the ongoing conflict and the resulting rise in crude oil prices, Lebanon is at risk of slowing growth, reduced consumer spending, and widening cash flow deficits. The country’s dependence on imported fuel exposes all economic sectors and energy-intensive supply chains to cost-push inflation.
- Higher global oil prices, and by extension higher fuel and basic commodity prices, will have a marked effect on households, particularly the most vulnerable. LCAT estimates that if Brent crude reaches USD 150 per barrel, Lebanese household spending on fuel, transportation, and utilities would rise by more than a quarter. Fuel shipments to Lebanon have continued since conflict began on March 2. Unless a naval blockade is imposed, supply shortages are unlikely in the near term.
- Humanitarian actors should plan for near-term higher fuel prices, and should prioritize coordinated transport and warehousing solutions to sustain programs given cost and access constraints.
By Crisis Analytics Team, Mercy Corps Lebanon
