Energy lockdown: Can Lebanon afford it?

The world remembers the COVID-19 lockdowns, when governments restricted movement, businesses closed, and economic activity came to a standstill. Now, amid ongoing wars, geopolitical tensions, disrupted oil supplies, and rising energy prices, another term is entering the conversation: energy lockdown.

Unlike pandemic lockdowns, an energy lockdown would aim to conserve energy rather than contain a virus. Governments could restrict fuel consumption, limit vehicle use, ration electricity, or reduce industrial activity to protect dwindling supplies.

But while countries assess the possibility of restricting energy consumption, Lebanon faces a more troubling reality. With chronic electricity shortages, heavy dependence on imported fuel, and an economy weakened by financial collapse, can a country already struggling to keep its lights on afford to consume even less energy?

Disruption, not lockdown

Marc Ayoub, an energy expert and Associate Fellow at the American University of Beirut’s Issam Fares Institute, explains to The Beiruter that countries generally resort to energy lockdowns during wars or severe supply shortages, primarily to preserve fuel reserves.

However, the economic consequences can be substantial, affecting trade, imports, exports, and overall economic activity.

According to Ayoub, the world has been experiencing an energy disruption for approximately six months, rather than a full-scale lockdown. Rising petroleum prices and supply interruptions have prompted governments to manage consumption and costs, but without imposing comprehensive restrictions.

Although he considers a global energy lockdown unlikely in the immediate future, prolonged wars, petroleum export restrictions, and declining international inventories could increase the risk.

The economic consequences are already visible. Higher energy prices raise transportation and production costs, fuel inflation, weaken purchasing power, and slow economic activity. If disruptions persist, Ayoub warns, these pressures could eventually contribute to a global recession.

Lebanon's 92% exposure

Lebanon is particularly vulnerable because of its overwhelming dependence on imported petroleum products.

According to Ayoub, imports account for more than 92% of the country's energy-related requirements for electricity generation and transportation, leaving it exposed to international oil prices, shipping costs, insurance premiums, and supply disruptions.

He recalls the difficulties faced by Électricité du Liban (EDL) during the summer, when higher gasoil prices constrained its ability to purchase sufficient fuel for electricity generation.

For Lebanon, fuel affordability can therefore be as threatening as physical shortages.

With oil prices around $110 per barrel, Ayoub warns that an increase toward $120 or $130 could intensify pressure on public finances and potentially force emergency measures.

To illustrate the scale, every $10 increase per barrel adds $10 million to the cost of purchasing one million barrels, excluding additional charges. While this is not a forecast of Lebanon's actual import bill, it highlights the financial exposure of an import-dependent economy.

Lebanese consumers are already paying the price.

Ghassan Baydoun, an expert at the Lebanese Institute for Market Studies (LIMS), tells The Beiruter that gasoline consumption in Lebanon has declined by approximately 40% amid higher fuel prices.

He also highlights changes in the Ministry of Energy's periodic pricing calculations, which now incorporate additional petroleum-product pricing factors beyond the Brent crude benchmark.

Higher refining, transportation, and insurance costs mean Lebanese consumers face increases that cannot be explained by crude oil prices alone.

Baydoun does not expect fuel supplies to disappear as long as imports continue. Instead, he anticipates smaller available quantities at considerably higher prices.

In practice, Lebanon is already experiencing a form of economic rationing: consumption is falling because people can no longer afford the same quantities of fuel.

The electricity trap

Lebanon's electricity crisis makes the prospect of further energy restrictions particularly alarming.

Households and businesses already depend on limited public electricity supplemented by expensive private diesel generators, exposing them to every increase in international fuel prices.

A January 2026 United Nations Development Programme study illustrates the extent of the crisis. EDL has an installed generating capacity of approximately 2,651 megawatts, but only 1,900 megawatts are available because of infrastructure limitations. Meanwhile, peak electricity demand can reach 3,844 megawatts during the summer, leaving a gap of approximately 1,944 megawatts, equivalent to nearly 51% of peak demand.

The same study found that approximately 34.7% of electricity generated was not billed, reflecting serious operational and commercial weaknesses.

The electricity sector has also historically burdened public finances, with government transfers to EDL averaging approximately 3.8% of GDP annually between 2010 and 2020, according to the UNDP study.

Baydoun warns that higher energy prices could further strain state finances, as ministries, public institutions, and security agencies face rising fuel and electricity expenditures.

He calls for immediate rationalization of energy use within public administrations, particularly official transportation, alongside stronger oversight and expenditure controls.

Meanwhile, he argues that inadequate regulation of private generator operators and insufficient transparency in EDL's production costs continue to burden consumers.

Although electricity tariffs can be periodically reviewed to reflect production costs, Baydoun cautions against passing inefficiencies and unjustified expenses directly to households and businesses.

A genuine energy lockdown could further constrain electricity generation, increase generator operating costs, and force difficult decisions over the allocation of limited supplies.

The cost of another energy shock

The consequences would extend far beyond electricity bills.

Hospitals require uninterrupted power to operate equipment and preserve medicines. Flour mills, pharmaceutical manufacturers, food distributors, and industrial businesses rely heavily on electricity and transportation.

When energy prices rise, businesses must either absorb additional costs, reducing profitability, or pass them on to consumers, increasing inflation.

Ayoub stresses that electricity costs are embedded in almost every product manufactured or sold in Lebanon.

Baydoun warns that serious energy disruptions could threaten healthcare, food supplies, industry, and transportation, potentially generating broader social instability.

The impact would be especially severe in an economy where households already face limited purchasing power and businesses struggle with high operating costs.

Can Lebanon afford it?

For Baydoun, Lebanon's vulnerability also reflects years of inadequate planning, particularly the failure to expand strategic petroleum storage capacity during periods of relatively low international prices.

Greater storage could have provided a buffer against sudden supply interruptions and price volatility.

He also emphasizes investment in solar and hydropower to reduce dependence on imported petroleum products.

International support could help. In 2024, the World Bank approved a $250 million project supporting electricity service restoration, renewable energy development, and sector reforms.

Baydoun also points to Qatar's expressed willingness to support Lebanon as a potential source of relief. He urges Lebanese authorities to explore whether such assistance could help secure energy supplies, including possible natural gas arrangements or temporary petroleum support.

Nevertheless, external assistance cannot replace structural reforms, reliable infrastructure, adequate fuel reserves, or effective emergency planning.

For Ayoub, a genuine energy lockdown would be especially difficult for Lebanon to withstand. Baydoun similarly warns that the country would suffer more severely than wealthier economies with stronger financial resources.

Lebanon's next energy crisis may arrive long before any official lockdown is declared. With fuel increasingly expensive and electricity already scarce, economic pressure is doing what government restrictions have not: forcing consumption down.

Lebanon has spent decades learning how to survive without reliable electricity. The next energy shock could test something far more fundamental: whether its economy can afford to keep running at all.