Libyan Rival Government to Stop Oil Output Over Bank Row - Yahoo Finance
Libya Rival Government to Stop All Oil Output Amid Bank Row
(Bloomberg) -- Libya’s eastern government said it will shut down all oil production and exports, after its Tripoli-based rival moved to replace the leadership of the central bank.
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The “force majeure” applies to all fields, terminals and oil facilities, the eastern authorities said Monday in a statement on Facebook. Brent crude prices jumped as much as 2.2% to above $80 a barrel.
A row over who leads the central bank, the manager of billions of dollars of energy revenue, has been brewing for over a week now, deepening political divisions and threatening a UN-brokered peace deal. The internationally acknowledged government in the country’s west has been seeking to replace the governor Sadiq Al-Kabir, who has refused to step down. A government delegation entered the regulator’s offices today to take over, according to local media.
The country produced a total of about 1.15 million barrels a day of oil last month, according to data compiled by Bloomberg. Since then, the biggest oil field called Sharara, which was pumping nearly 270,000 barrels daily, has halted. The east is home to the Sirte basin where most of Libya’s oil reserves and four of the country’s oil export terminals are located.
A drop in exports may push Brent crude prices temporarily to the mid-$80s a barrel, analyst at Citigroup Inc. said in a note earlier on Monday.
Deep-seated political divisions in Libya’s east and west, despite a 2020 United Nations-backed cease-fire deal aimed at ending their fighting, have often resulted in battles and blockades that target the country’s most valuable resource. The nation sits atop Africa’s biggest known crude reserves, but production has suffered after a decade of political strife. The frequent shutdowns — including at the biggest field called Sharara that’s been halted since early August — have partly hit global oil markets.
The central bank has become the latest institution for control of the North African nation, which has been wracked by unrest since the 2011 NATO-backed uprising against long-time ruler Moammar Al Qaddafi and is split between dueling governments in the east and west.
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