Lebanon has 'total blackout' after Zahrani power plant runs out of fuel

Lebanon's Zahrani power plant ran out of fuel oil on Aug. 17, leading to a "total blackout" across the country including the Beirut airport, ports, water pumps, sewage systems and prisons.

The depletion of the plant's gasoil reserves affected "all Lebanese territories," state utility Electricité du Liban said in an Aug. 17 statement carried on state news agency NNA. Public water pumps were also affected, which reduced water flows to households. Many private citizens and businesses pay for costly generators to fill the gap when the state's electricity tap runs dry, so the fuel shortage's impact on households and private businesses will be felt less.

"The institution will restart the units that were forcibly taken offline once it secures a supply of gasoil and electricity will then be gradually restored to its previous levels," the company said in the statement.

It may take 24-48 hours to restore power, caretaker Energy Minister Walid Fayad told L'Orient Today on Aug. 17. The next delivery of fuel is scheduled for Aug. 25, he said.

S&P Global Commodity Insights analysis from May 2024 found that demand for fuel oil in the country was gradually recovering following COVID. Oil product demand was expected to decrease until 2025 before gradually recovering through 2040, it said.

On Aug. 14, caretaker Prime Minister Najib Mikati said following a cabinet meeting that an agreement had been reached to "purchase some of the necessary fuel" to prevent Electricité du Liban from shutting all its power plants, L'Orient Today reported at the time.

Iraq approved in July the delivery of fuel to two Lebanese power plants, including Zahrani, following a fuel swap deal signed three years ago, Fayad said, according to L'Orient Today on July 11.

But Lebanon's power plants can't process the heavy Iraqi crude.

Finalized in 2021, Iraq agreed that fuel oil sold to Lebanon would be sold at international prices and would be paid in exchange for Lebanese goods and services, like healthcare provided to Iraqi citizens. Lebanon would resell the Iraqi fuel and use the proceeds to buy spot cargoes of fuel that meets its specifications.

Mired in a protracted economic crisis, Lebanon has long suffered rolling blackouts that became more frequent as the economy deteriorated in 2019. By 2023, the local currency lost nearly 90% of its value against the US dollar. Reliant on imports, primarily sourced in dollars, the country has struggled to buy basic goods, including fuel for its power stations.