Libyan oil production strangled as world hungers for energy

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BEIRUT — Libya’s oil production has come to an almost complete halt due to a political stalemate, officials have told media, at a time of heightened global concerns over crude supplies.

Libya’s oil and gas ministry told news outlets this week that the country’s oil production had fallen more than 85%, with output now at 100,000 to 150,000 barrels a day, according to Reuters – a fall shocking compared to a once-robust production of 1.2 million barrels per day last year.

The drop in production, initially reported by Bloomberg, is putting further pressure on a global market that has already seen the price of a barrel of Brent crude oil jump 50% this year, to nearly $120. It also comes at a time when Europe is desperately looking for alternatives to Russian energy from sources in Africa and the Mediterranean.

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The blockade of the oil installations is motivated by a political rivalry between two main factions in the country for control of the Libyan government. Tripoli-based Prime Minister Abdulhamid Dbeibah, who took office in a UN-backed process, has refused to hand over power to Fathi Bashagha, who was named prime minister in March by the parliament-based to the east, which in turn is backed by the self-styled Libyan National Army (LNA).

The LNA is led by Khalifa Hifter, an eastern-based warlord who controls significant territory. In 2019, his forces launched an offensive against Tripoli, where a UN-backed government is in power.

The fight has also featured extensive involvement from foreign powers, including Turkey, Qatar, Egypt, the United Arab Emirates and the Russian mercenary group known as the Wagner Group.

A much-anticipated parliamentary election in December has been postponed, dashing international hopes of a vote that could help lift Libya out of the decade of chaos that followed the overthrow of Muammar Gaddafi in the 2011 revolution. followed, Libya descended into chaos as rival camps battled for control of the oil-rich nation – with the facilities at the heart of the country’s wealth turned into bargaining chips.

Hifter’s group controls many of the nation’s major oilfields and terminals. Groups of protesters shut down two major oil fields in April, halving the country’s production to 600,000 barrels a day at the time, according to Bloomberg. The continued closures are apparently the work of local protesters demanding that Dbeibah hand over power, at the request of the LNA, Reuters reported.

A video statement then by protesters at the Zueitina oil terminal demanded both the ousting of Dbeibah and the dismissal of Mustafa Sanallah, chairman of the National Oil Corporation, because the company had sent oil revenues to the Dbeibah government.

Hifter’s use of a tribesman to shut down oil facilities is aimed at starving the UN-backed unity government in Tripoli, said Anas El Gomati, director of Libyan think tank the Sadeq Institute, as well as pressuring the United States and Europe to support Hifter’s rival government.

It is not the first time that Hifter has used such tactics towards international powers: in 2020, a months-long blockade cost Libya heavy financial losses in Hifter’s attempt to pressure his rivals during the talks. of peace.

“It should be noted that Russian mercenaries from the Wagner Group working alongside Hifter’s forces since 2019 have long exerted influence” in some oil installations since 2020, Gomati said. “Russia stands to benefit as Europe remains dependent on Russian energy and deprived of alternatives in the Mediterranean.”

“This encourages Hifter and his Russian supporters to forcefully arm the international community in Libya, and could destabilize the country’s fragile ceasefire,” Gomati added.

The Oil and Gas Ministry could not immediately be reached for comment. In a message published on its Facebook page on Saturday, the ministry underlined the negative effect of these blockages, “especially with the unprecedented rise in prices on the world oil market”. The blockade, he continued, will cause Libyans to lose much-needed income.

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Post expires at 2:26am on Monday June 27th, 2022

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