diff --git a/libcloud/storage/drivers/local.py b/libcloud/storage/drivers/local.py
index f47d7c0649..b2f533e42e 100644
--- a/libcloud/storage/drivers/local.py
+++ b/libcloud/storage/drivers/local.py
@@ -59,7 +59,7 @@ def __enter__(self):
         return True
 
     def __exit__(self, type, value, traceback):
-        return value
+        return False
 
 
 class LockLocalStorage:
diff --git a/libcloud/test/storage/test_local.py b/libcloud/test/storage/test_local.py
index 7d7f271405..81ff58a2f3 100644
--- a/libcloud/test/storage/test_local.py
+++ b/libcloud/test/storage/test_local.py
@@ -237,6 +237,37 @@ def test_objects_success(self):
         container.delete()
         self.remove_tmp_file(tmppath)
 
+    def test_upload_object_via_stream_without_locking_propagates_error(self):
+        driver = LocalStorageDriver(self.key, ex_use_locking=False)
+        container = driver.create_container("failed-stream")
+        error = OSError("source stream failed")
+
+        def failing_stream():
+            yield b"partial data"
+            raise error
+
+        with self.assertRaises(OSError) as raised:
+            driver.upload_object_via_stream(failing_stream(), container, "object")
+
+        self.assertIs(raised.exception, error)
+
+    def test_upload_object_without_locking_propagates_copy_error(self):
+        driver = LocalStorageDriver(self.key, ex_use_locking=False)
+        container = driver.create_container("failed-copy")
+        driver.upload_object_via_stream(iter([b"original"]), container, "object")
+        missing_source = os.path.join(self.key, "missing-source")
+
+        with self.assertRaises(FileNotFoundError):
+            driver.upload_object(missing_source, container, "object")
+
+    def test_upload_object_via_stream_without_locking_success(self):
+        driver = LocalStorageDriver(self.key, ex_use_locking=False)
+        container = driver.create_container("successful-stream")
+        obj = driver.upload_object_via_stream(iter([b"first", b"second"]), container, "object")
+
+        self.assertEqual(obj.size, 11)
+        self.assertEqual(b"".join(driver.download_object_as_stream(obj)), b"firstsecond")
+
     def test_get_container_doesnt_exist(self):
         try:
             self.driver.get_container(container_name="container1")