Two Libyan ports stop loading oil amid political standoff

Hatem Mohareb and Salma El Wardany April 17, 2022

(Bloomberg) — Two Libyan ports have been forced to stop loading oil after protests calling for Prime Minister Abdul Hamid Dbeibah to step down spilled over into the OPEC member’s energy sector.

State-run National Oil Corp. on said Sunday it was declaring force majeure on loadings at Mellitah in western Libya after “a group of individuals” stopped production at El Feel, a 65,000-barrel-a-day field that feeds the port.

Zueitina export terminal in eastern Libya has also stopped operations due to demonstrations against Dbeibah, according to people familiar with the matter. One tanker near the port was barred from loading 1 million barrels, two of the people said.

The shutdowns are the latest in a series of disruptions to hit Libya’s oil industry amid a worsening political crisis.

The country’s crude production has averaged just over 1 million barrels a day this year, down from almost 1.2 million in 2021, according to data compiled by Bloomberg. The drop is costing the country millions of dollars in lost revenue and comes when the global oil market is already tight, with Brent crude prices having surged above $110 a barrel following Russia’s invasion of Ukraine.

El Feel is located near Sharara, which is Libya’s biggest field and feeds the port of Zawiya.

The oil sector must be left “outside conflicts,” the NOC said on Sunday. That’s essential “to maintain what’s left of the ailing infrastructure due to the random blockades and the lack of budgets over the past years.”

The outages come as the North African nation, mired in conflict since the 2011 fall of dictator Moammar Al Qaddafi, faces a standoff between rival politicians. Dbeibah is resisting demands from some lawmakers to resign after they declared former interior minister Fathi Bashagha as prime minister in February.

Earlier this month, representatives of eastern commander Khalifa Haftar quit a national military committee that’s meant to ensure a cease-fire holds. They also said Haftar should block oil exports. 

Other rival Libyan officials have been holding talks in Egypt’s capital, Cairo. Libya was meant to hold a presidential election in December, but it was delayed with just days to go, dealing a blow to peace efforts.

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