Libya’s oil crisis has intensified as exports from five eastern ports have been suspended, while the country’s oil production has significantly dropped amid an ongoing dispute over control of the central bank. This could adversely impact global oil price.
The eastern-based government ordered the halt of oil-loading operations at the ports of Brega, Es Sider, Ras Lanuf, Zueitina, and Hariga, affecting a combined capacity of around 800,000 barrels per day.
The crisis has caused Libya’s oil output to plummet to less than 450,000 barrels per day, down from 1 million barrels per day before the eastern authorities ordered the shutdown on August 26. The stoppage has impacted several major oil fields, including Waha Oil Co., Sarir, Nafura, Masla, Wintershall, Amal, and El-Feel. The Sharara field, the nation’s largest, had already been shut down earlier this month.
This escalation is part of a broader power struggle between Libya’s eastern and western governments, which have been vying for control for nearly a decade. The current standoff centers on the central bank, where the internationally recognized government in the west recently attempted to replace Governor Sadiq Al-Kabir, who has strong support in the east. The central bank’s control is crucial as it manages billions of dollars in oil revenues.
Libya’s energy resources have long been a battleground for these factions, leading to frequent disruptions in oil production and exports. The current stalemate threatens the United Nations-backed political agreement of 2021, which was intended to unify the rival camps following elections that never occurred, leaving tensions unresolved.
