The oil embargo in Libya is costing the country billions of dollars

Last updated on May 1st, 2022 at 10:05 am

The closure of Libya’s oil facilities is costing the country tens of millions of dollars every day, while global oil prices are at their highest in years, according to the country’s oil minister. Oil is the lifeline of the North African country, which has struggled to recover from a decade of strife since tyrant Moamer Kadhafi was deposed in a NATO-backed rebellion in 2011. They are two of the most important ports in Libya, but since mid-April, the country’s internal crisis has kept them and many other oil fields from moving.

In an interview with AFP at his office in Tripoli, Minister of Oil and Gas Mohammed Aoun stated, “Production has plummeted by roughly 600,000 barrels a day,” which is half of the previous level. “With a sale price of $100 per barrel, daily losses are at least $60 million,” he claimed.

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Global crude prices have reached levels not seen since 2014, when Russia began its invasion of Ukraine in February, provoking Western sanctions. The benchmark West Texas Intermediate crude in the United States soared above $106 per barrel on Friday. Brent crude has surpassed $109 per barrel. After Libya’s eastern parliament chose Fathi Bashagha to be its new prime minister in February, it caused the country to shut down. This was a direct challenge to Abdulhamid Dbeibah, who was in charge in Tripoli.

According to analysts, eastern Libyan forces supporting Bashagha have forced the shutdown of the oil facilities in an attempt to persuade Dbeibah to resign, but the incumbent says that he will only transfer power over to an elected successor. Khalifa Haftar is the strongman in Libya’s east, and Bashagha’s party is linked to him. Haftar led a failed attack on Tripoli in 2019–20, accompanied by forces that blocked oil fields.

“Apparently, people asking for the closure say they have claims for development of their districts,” Aoun said of the political aspects of the shutdown.