Libya's Oil Blockade Has Cost The Country Over $5 Billion

Libya’s crude oil exports have shrunk by 92 percent and the National Oil Corporation has lost some $5 billion since the start of the oil blockade early this year, the Libyan state energy company said in a statement cited by local media and Reuters.

A group of paramilitary formations affiliated with General Khalifa Haftar’s Libyan National Army occupied Libya’s oil export terminals in January along with pipelines and fields. The blockade came amid continued fighting between the LNA, which is loyal to the eastern Libyan government and the forces loyal to the Government of National Accord, which is recognized by the United Nations.

Soon after the blockade, NOC declared force majeure on oil exports, with the company’s chairman Mustafa Sanalla warning that the blockade could end up costing Libya $55 million daily. At the time, the losses in production were estimated at between 500,000 bpd and 800,000 bpd. As of late January, Libya’s production was around 300,000 bpd but Sanalla said it could go as low as 72,000 bpd. As of early April, production was down below 100,000 bpd. That’s down from over 1.2 million bpd before the blockade.

Fuel and other oil product output has meanwhile fallen to zero because refineries had to be shut down because of the blockade, too.

“The first quarter of 2020 was a huge decrease in revenues for Libya, as a direct result of the illegal blockade of numerous oil and gas facilities. This is only part of the picture, as the corrosion in pipes caused by still oil and salt water is resulting in physical damage that will cost millions to fix when the crisis is over,” Sanalla said now.

“Libyan people across the whole country are the ones who will feel the cost of this illegal blockade. The low revenue will simply delay further any government investment in public services, the national economy, and the foundations of future prosperity for Libya,” he added.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Markets Could Soon Face A Devastating Supply Crunch
  
• Oil Slides As Russia Plans To Raise Production
  
• Trump Wants To Mediate In Escalating Conflict Between Asian Superpowers