Libya is now reportedly producing 300,000 bpd of crude oil, although the NOC has been silent on numbers since September 24th. The million-dollar question of the week for the crude oil glut is what the arrest of the former CEO of Libyan Foreign Bank might mean for Libyan oil production at a time when the market really doesn’t want it.
Four ports are still closed, including Zawiya, and that means oil still isn’t being exported from Libya’s largest field, Al-Sharara.
That the CEO of Libyan Foreign Bank, Mohamed bin Youssef, was arrested isn’t in and of itself surprising. In 2018, the Libyan Central Bank (which owns the Foreign Bank) fired Yousseff for the same reason he was arrested: fraud. But the timing of the arrest is important.
Recall that General Haftar had been pushing for a UN audit of the Central Bank, alleging that oil revenues were being used to fund militias backing the Government of National Accord (GNA) in Tripoli. The problem for Haftar was always that he controlled the oil but not the oil revenues.
So now, as Haftar is allowing the re-opening of Libyan ports and the resumption of Libyan crude oil exports, the next struggle will be over oil revenues funneled through the Central Bank. This is a power struggle that cannot be underestimated. And while Haftar is opening the taps, it’s a gradual restart and he can pull the plug anytime again if there is no agreement on the distribution of…