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U.S. Warns Of Sanctions As Libya’s Oil Chaos Persists

After Libya lifted and then declared again force majeure on all its oil exports in the span of just two days, the United States warned that parties in the conflict that continue to undermine Libya’s economy and seek confrontation face isolation and risk of sanctions.

After six months of port blockades and no exports, Libya’s National Oil Corporation (NOC) said on Friday that it lifted force majeure on all oil exports from Libya.

NOC placed the oil terminals at Hariga, Brega, Zueitina, Es Sider, and Ras Lanuf under force majeure at the beginning of this year, after forces affiliated with the Libyan National Army (LNA) of eastern Libyan strongman General Khalifa Haftar occupied Libya’s oil export terminals and oilfields.

As a result of the blockade, oil production in Libya plummeted to just 100,000 barrels per day (bpd) compared to 1.2 million bpd before the blockade.

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However, just two days after lifting the force majeure, NOC declared force majeure again, citing a renewed blockade on its oil export terminals and blaming it on interference from the United Arab Emirates (UAE).

“This is gravely disappointing, especially following repeated statements by very senior representatives of the UAE last week in support of international efforts to restart oil production in Libya. Wagner and Syrian mercenaries now occupy Es Sider oil port and Wagner and Sudanese mercenaries are camped within the vicinity of the Sharara oil field, preventing Libyan oil from flowing,” NOC said on Sunday.

The U.S. Embassy in Libya said it “regrets foreign interference against Libya’s economy.”

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“The door remains open for all who lay down weapons, reject foreign manipulation, and come together in peaceful dialogue to be a part of the solution; however, those who undermine Libya’s economy and cling to military escalation will face isolation and risk of sanctions,” the U.S. Embassy said.

On Monday, the UAE’s foreign minister Anwar Gargash said on Twitter:

“The UAE, alongside its partners, wants to see a return to oil production in Libya as soon as possible, with safeguards in place to prevent the proceeds fueling further conflict. We continue to work for an immediate ceasefire and return to a political process.”

By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on July 14 2020 said:
    Before threatening sanctions against parties in the conflict that continue to undermine Libya’s economy, sanctions should be imposed on the United States, Britain and France who started a civil war in Libya in pursuit of their oil interests.

    Turkey who is directly involved in Libya on the side of the UN-supported GNA government and who is imposing its will on the Eastern Mediterranean won’t be intimidated by US sanctions.

    The UAE and Egypt who support the self-styled Libyan National Army of Khalifa Haftar are beyond sanctions being allies of the United States. Moreover, President Trump had previously declared openly his support of Hafter who is besieging Libya’s oil installations and export terminals. Is the United States going to impose sanctions on him as well?

    Furthermore, China, Russia, India and Turkey are openly breaking US sanctions every day of the week and dealing with Iran and Venezuela with many other countries doing so covertly.

    US sanctions have become a joke. It is the weapon of choice of the hapless. And Libya has unfortunately become a mere footnote to the global oil market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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