Lebanese Merchants Warn of Unprecedented Deflation

Lebanon is facing an unprecedented economic crisis. (AFP)
Lebanon is facing an unprecedented economic crisis. (AFP)
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Lebanese Merchants Warn of Unprecedented Deflation

Lebanon is facing an unprecedented economic crisis. (AFP)
Lebanon is facing an unprecedented economic crisis. (AFP)

The dozens of banners, announcing 80 and 90 percent discounts, on shop windows in Lebanon’s Zalka region failed to attract any clients, amid an unprecedented economic slowdown in the country.

Nicolas Chammas, head of the Beirut Traders Association, said last week that this year’s summer season was the worst, in terms of commercial trade, due to security developments that took place in the country.

Chammas revealed that in 2018, 10 percent of Beirut’s commercial institutions shut down, and that the number was higher is other areas.

He said that the current economic slowdown is mainly due to the budget deficit, the bloated public sector and the crisis in Syria.

He said the recent Labor Ministry’s crackdown on illegal foreign workers was not enough to improve the economic situation in the country.

“There should be radical and quick solutions or else we will witness the biggest crisis not seen in 50 years,” Chammas said.

Both the Labor and the Economy Ministries are trying to pass measures that should contain the crisis.

However, economic experts say that the lack of any national and comprehensive economic plan would not improve the situation.

According to the Labor Ministry, around 123 institutions, owned by foreigners, were closed across the country since July because they lacked the necessary legal work permits.

However, hundreds of stores owned by Lebanese have also closed after failing to pay the rent and other expenses, such as electricity bills.

Elie Yachoui, a Beirut-based economist, told Asharq Al-Awsat that the extreme economic slump is reflected in this year’s zero economic growth, which means the absence of consumption.

As a solution, he suggested that Lebanon introduce change in the policy of the Central Bank’s increased interest rates, which hit consumption, investment and the economic growth, and put an end to the political shares inside state institutions.



Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)
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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)

Saudi Arabia has long followed a clear and transparent approach to preserving stability in global energy markets. Historically, it has consistently adhered to all decisions issued by the OPEC+ alliance and played a leading role alongside other producers to ensure compliance and promote the collective good.

Recently, the Kingdom briefly increased production volumes. However, the additional output was neither marketed domestically nor exported abroad. Instead, it was directed as a precautionary measure to strengthen strategic reserves, improve supply flows between the country’s eastern and western regions, and rebalance stocks held in overseas storage facilities.

Asharq Al-Awsat reached out to energy specialists to understand the significance of this move for energy security. Experts explained that building strategic reserves allows Saudi Arabia to respond swiftly to customer needs in the event of political crises, regional wars, adverse weather, or other unforeseen disruptions.

Fouad Al-Zayer, former head of data services at OPEC and an energy expert, said the Kingdom maintains millions of barrels in storage both inside and outside its borders. These reserves serve as a buffer during emergencies, enabling the country to compensate for supply shortfalls within a short timeframe. He emphasized that this stored crude is strategically critical in the face of geopolitical tensions and conflicts.

According to Al-Zayer, Saudi Arabia relies on an extraordinary reserve capacity unmatched by any other producer. The country currently produces more than 9 million barrels per day, with the capability to pump even higher volumes if needed. He noted that Saudi reserves alone account for 3 million barrels per day out of roughly 5 million barrels in global spare capacity, underscoring Riyadh’s central role in stabilizing markets and upholding its commitments under OPEC+ agreements.

He added that Saudi Arabia also hosts the International Energy Forum, which works to improve data quality and transparency in the sector. In June, the Kingdom’s output reached about 9 million barrels per day, with the modest increase attributed to logistical considerations. Al-Zayer stressed that it is common for producers to temporarily boost production to support maintenance operations or replenish storage, without impacting the broader market, since these barrels are not immediately traded.

He reiterated that Saudi Arabia has always honored OPEC+ production targets and has played a pivotal role in encouraging other members to meet their quotas.

Meanwhile, Dr. Mohammed Al-Sabban, former senior adviser to the Saudi Minister of Petroleum, explained that the Kingdom has consistently proven itself a reliable and secure supplier to global energy markets. He noted that Saudi Arabia’s recent statement clarified the reasons behind the June production uptick, emphasizing that the additional oil was neither destined for local consumption nor for export but was solely intended to refill domestic and foreign storage. He said such measures do not represent any breach of commitments, unlike the practices of some other countries.

Al-Sabban pointed out that Saudi Arabia has often gone beyond required cuts to help stabilize markets. Even the recent production increases, he said, fall within the scope of voluntary adjustments agreed upon by OPEC+ members. He noted that in July, Saudi Arabia raised production in line with credible studies indicating the market could absorb these volumes without disruption.