Libya says it may suspend oil exports from key terminals

Libya’s state oil company said it may suspend exports from the Gulf of Sirte, which contains many of the OPEC member’s main ports, in the next three days amid a worsening political crisis.

The National Oil Corp. said it could declare force majeure, a clause in contracts allowing shipments to be halted, within 72 hours, according to a statement on Monday.

The Gulf of Sirte includes the exports terminals of Es Sider, Ras Lanuf, Brega and Zueitina.

Libya’s crude production has roughly halved since mid-April to 600,000 barrels a day, according to Bloomberg estimates. That has further tightened a global oil market in which prices have surged 45% this year to around $110 a barrel, mostly due to the fallout of Russia’s invasion of Ukraine.

The NOC’s move comes as Libya grapples with protests that are forcing many oil fields and ports to shut down.

No individual or minister should be allowed to use the oil sector as a bargaining chip, NOC Chairman Mustafa Sanalla said.

“The situation is quite dangerous,” he said. “There are closures in the Sirte region and there are people who try to demonize the oil sector.”

The nation has been mired in conflict since the fall of dictator Moammar Al Qaddafi in 2011. It’s now facing a standoff between two politicians—Abdul Hamid Dbeibah and Fathi Bashagha—who each claim to be the legitimate prime minister.

There’s also a power struggle between Sanalla and the oil ministry, headed by Mohamed Oun. Their relationship between has deteriorated since Oun’s appointment last year, with the minister on several occasions trying to dismiss Sanalla.

Recently, Oun has complained that the NOC is not sending production figures to the ministry.

Dbeibah, who’s based in Tripoli, told Oun last week that he would change the NOC’s board. But it’s unclear if he has the power to do that or if Sanalla would retain his position in a reshuffle.