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U.S. Threatens Libya's General Haftar With Sanctions Over Russian Ties

The United States has threatened General Khalifa Haftar with sanctions over his ties with Russia, the Wall Street Journal reports, after Russian military contractors with ties to the Kremlin seized control of Libya's largest field and the oil export terminal of Es Sider.

General Haftar and his Libyan National Army are affiliated with the eastern Libyan government, and last year Haftar launched an offensive against the UN-recognized Government of National Accord. The U.S. has been supporting Haftar, but now the tide seems to be turning as the LNA and Russian mercenaries forge closer ties.

The LNA imposed a blockade on all Libyan oil terminals in January, which crippled the country's oil industry and sent production plummeting from more than 1 million bpd to less than 100,000 bpd in less than six months. The blockade also cost billions in losses in terms of oil revenue.

At the end of June, there were signs that the oil blockade could come to an end, with paramilitary groups fighting alongside the LNA saying they had negotiated the reopening of the oil ports. But then, according to the WSJ report, mercenaries from Vagner Group, a Russian military contractor, moved to take control of the Es Sider port. This, according to officials from Libya and Europe, changed Haftar's mind about lifting the blockade. This change of heart did not sit well with Washington, so it waved the sanction card in Haftar's face.

Related: Is The Bottom Finally In Sight For U.S. Drilling Rigs?

Meanwhile, fighting broke out between other armed groups in Libya's Oil Crescent earlier this month. The National Oil Corporation (NOC) said last week that "Violent Clashes took place over the past 48 hours in the Brega region, only hundreds of meters away from oil tanks, between armed groups called Al-Saiqa and the Petroleum Facilities Guard (PFG), all of whom belong to Khalifa Haftar."

Libya had planned to increase its oil production to 2.4 million bpd over the next four years, but this was before the blockade began in January. Now, the NOC says it expects average production to be 650,000 bpd in 2022, "in the absence of an immediate restart of oil production and because of the state's failure to provide the requested budgets to address the many challenges resulting from the blockade."

By Charles Kennedy for Oilprice.com

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