A week after the conflict over the choice of a governor for the Central Bank of Libya, oil production is once again under threat. Indeed, in a video published yesterday, the head of the eastern Libyan government based in Benghazi, Osama Hammad, announced the suspension of oil production and exports until further notice. No details were given on how long this measure will last.
According to the same source, all oil fields were shutting down, halting production and exports, but the Tripoli-based National Oil Corporation, which controls oil resources, did not provide confirmation.
The Libyan official explained that this decision was taken “as a sign of protest against the attacks against officials of the Libyan central bank which threatens the Libyan economy.”
Libyan factions are locked in a power struggle over control of the central bank and oil revenues. The latest tensions have arisen following efforts by political factions to oust the chairman of the Central Bank of Libya (CBL), Sadiq Al Kabir, and rival armed factions have mobilized on both sides.
The Central Bank is, for information purposes, the only internationally recognized depository of Libyan oil revenues, which constitute a vital economic income for the country.
The Libyan government also said in a statement relayed by the specialized agency Attaqa: “We have followed repeated attacks against the leaders, employees, and departments of the Central Bank of Libya, by outlaw groups, with the instigation and assistance of the Presidential Council posing as itself.”
The Libyan government has indicated in this wake that the attacks and the attempts to force entry into the headquarters of the bank have resulted in stopping and hindering the entire course of the financial transactions of the State, and have harmed citizens in general.
As a reminder, in early August, the NOC, which plans to increase the daily production total from around 1 million barrels to 1.5 million barrels in 2025, then to 2 million barrels over two years until 2027, declared a case of force majeure in one of the country’s largest oil fields, Sharara, due to the protests that took place in the region.
It is worth noting that the announcement of the closure of oil fields in Libya comes at a time when the country is facing a major crisis related to fuel shortages in a large number of cities. This has led to serious traffic jams on the roads, in addition to the accumulation of queues of cars in front of gas stations.
For reference, Libya produced a total of about 1.15 million barrels of oil per day last month, according to Bloomberg data. Work was subsequently halted at Sharar, Libya’s largest oil field, which was pumping nearly 270,000 barrels per day. Against the backdrop of this evolving crisis, yesterday, around 11:00 GMT, the price of Brent crude, for delivery in October 2024, rose by 2.32% to $80.84 per barrel.
