Libya oil exports grind to halt in political tussle

Monday July 2 2018



More by this Author

Libya's crucial oil exports from its production heartland ground to a halt Monday in a financial showdown between the country's rival political administrations.

The crisis has slashed production, previously estimated at one million barrels per day, by 850,000 bpd, said the National Oil Corporation run by the Tripoli-based Government of National Accord (GNA).

The NOC said all exports have been suspended from the oil crescent in northeast Libya after operations were frozen at the terminals of Al-Hariga and Zweitina.

Exports from the region's two other ports, Ras Lanuf and Al-Sidra — seized from a rival militia by military strongman Khalifa Haftar's self-styled Libyan National Army (LNA) — were already suspended on June 14.

Their obligations

The NOC declared force majeure on crude oil loadings at the ports, a status that frees parties to a contract from their obligations due to circumstances beyond their control.

The suspension amounts to a $67.4 million a day loss in Libya's heavily oil-dependent public revenues, according to the NOC.

Libya has been wracked by chaos since the 2011 Nato-backed uprising that toppled and killed long-time dictator Muammar Gaddafi, with two rival authorities vying for control.

Without permission

The LNA recaptured the terminals in June after they were seized by armed groups led by militia leader Ibrahim Jadhran, who had controlled them from 2011 to 2016.

Haftar's forces said they would hand the installations and their revenues to an eastern administration that rivals the UN-backed GNA in the capital.

It warned that "no tanker will be allowed to dock" in the ports without permission from a Benghazi-based rival NOC.

But the GNA last week urged the United Nations to block any "illegal" oil exports, and the NOC in Tripoli said Monday it was the "only recognised Libyan entity" responsible for oil production and exports.