Hezbollah-Israel Conflict Threatens Lebanon’s Fragile Economy, Report Says

Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)
Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)
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Hezbollah-Israel Conflict Threatens Lebanon’s Fragile Economy, Report Says

Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)
Smoke rises following an Israeli air strike on Khiam in southern Lebanon on October 29, 2024. (AFP)

Analysis from a humanitarian group working in Lebanon forecasts two scenarios in its report on the Hezbollah-Israel conflict, both predicting a severe economic contraction in Lebanon by early 2025.

Mercy Corps’ Lebanon Crisis Analysis Team says Israel’s continued strikes on suspected Hezbollah targets in Lebanon, without blocking key infrastructure, will still bring severe economic and humanitarian risks.

Lebanon’s economy could contract by 12.81%, or $2.305 billion by January 2025, with impacts hitting agriculture, manufacturing, and services hard in the South and Bekaa Valley.

Agriculture in South Lebanon, which drives 80% of its economy, may come to a halt, while factories face shutdowns, the report says. “The Bekaa Valley, responsible for 2% of national GDP, will see similar disruptions, with 70% of farmland under threat and many Syrian laborers fleeing,” it adds.

The service sector, particularly tourism, stands to lose $1.256 billion, potentially crippling a vital part of the economy.

If Israel imposes a stricter blockade and expands bombings to key infrastructure, Lebanon’s economic loss could rise to 21.9% of GDP, or $3.938 billion, according to the report.

Over 1.5 million people could be displaced, with political and intercommunal tensions intensifying as Shiites flee to diverse religious regions that are majority Christian, Druze or Sunni, the report adds.

Already, 1.2 million people have been displaced from villages in southern and eastern Lebanon as well as Beirut’s southern suburbs.

Lebanon, already enduring a five-year economic crisis marked by a severe currency collapse, had just begun showing signs of recovery before the war erupted.



TotalEnergies Q3 Income Hits Three-year Low

(FILES) This photograph taken on October 5, 2022, shows a logo of Total Energies at a gas station in Genech, northern France. (Photo by Sameer Al-DOUMY / AFP)
(FILES) This photograph taken on October 5, 2022, shows a logo of Total Energies at a gas station in Genech, northern France. (Photo by Sameer Al-DOUMY / AFP)
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TotalEnergies Q3 Income Hits Three-year Low

(FILES) This photograph taken on October 5, 2022, shows a logo of Total Energies at a gas station in Genech, northern France. (Photo by Sameer Al-DOUMY / AFP)
(FILES) This photograph taken on October 5, 2022, shows a logo of Total Energies at a gas station in Genech, northern France. (Photo by Sameer Al-DOUMY / AFP)

French oil major TotalEnergies reported third-quarter adjusted net income at a three-year low of $4.1 billion on Thursday, slightly missing expectations as refining margins and upstream outages dragged down earnings.
Adjusted net income was down 37% from a year earlier and 12.7% lower from the previous quarter's $4.7 billion. The result just missed analyst expectations of $4.2 billion, Reuters reported.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell 23.6% year on year to $10 billion.
Earlier this month, TotalEnergies warned its financial results would take a hit as its margin for converting crude oil into refined fuels tumbled 65%.
Global refining margins have dropped sharply in recent months in the face of weaker economies and the start-up of several new refineries in Asia and Africa, while oil prices fell 17% in the quarter - the largest quarterly decline in a year - on worries about the global oil demand outlook.
TotalEnergies shares were down 1.5% in early trading. RBC analyst Biraj Borkhataria said Total reported "weaker cash generation relative to expectations", and that while "divisional estimates were broadly in line with consensus ... estimates have been falling following the recent trading update."
The company confirmed $2 billion in share buybacks for the fourth quarter and decided a third interim dividend of 0.79 euros per share for 2024.
In addition to a 83% drop in quarterly refining and chemicals division profits year-on-year, Total's integrated LNG division also made 21% less than the third quarter last year, with the company citing low gas market volatility as a hamper on trading profits. Integrated power, which includes renewables, was down 4% from a year ago.
TotalEnergies took a $1.1 billion impairment related to the August bankruptcy filing of US subsidiary SunPower, and its exit of several South African offshore blocks.
Quarterly hydrocarbon production of 2.4 million barrels of oil-equivalent per day was at the low end of guidance given at half year due to security-related disruptions in Libya and an outage at the Ichthys LNG plant in Australia.