- 06
- Oct.
- 2024
Stakeholders in the oil derivatives import sector are on high alert, closely monitoring the evolving security situation in the country.
In Lebanon, a country plagued by violent military actions, disruptions in the supply chain were predictable, although they remain limited for now. One of the most vulnerable sectors is the importation of oil derivatives.
On Friday, tankers registered under the Italian flag were six kilometers off the Lebanese coast when they received orders to return to their home port. As a result, these vessels have not serviced Lebanon and Israel since Friday. In fact, the Italian ship-owners believe that maritime security is compromised, preventing the safe passage of tankers.
According to Maroun Chammas, President of the Union of Oil Importing Companies, Italian-flagged tankers have been replaced by Greek vessels. He hopes that other countries will not follow Italy's lead, allowing oil import operations to proceed without disruption.
Price Change
Meanwhile, last Friday, the weekly price list for oil derivatives revealed a fluctuation in the reference exchange rate, catching analysts off guard. The rate increased from LBP 89,700 to LBP 90,000 per dollar, while Lebanon’s Central Bank (BDL) made no changes to the official exchange rate, which remains at LBP 89,500 per dollar. This rate has been fixed since the suspension of operations on BDL's exchange platform, Sayrafa, in August 2023.
Despite this slight increase, this raise may herald troubling times, especially given that the military actions between Israel and Hezbollah foster an environment ripe for chaos.
Brent Crude Oil Price
On the international market, amid growing concerns over potential supply disruptions in the Middle East, Brent crude oil contracts rose by 0.5%, reaching just over $78.40 per barrel on Friday, their highest level in five weeks. Fears escalated after US President Joe Biden avoided explicitly condemning a possible Israeli strike on Iranian oil facilities.
In this context, it's important to note that the price of Brent crude oil is a key factor in fuel costs, as it is the raw material for producing energy products. However, the main concern of Lebanese consumers today is the price at the pump.
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