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Libyan Oil Exports May Totally Stop

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Libyan Oil Exports May Totally Stop

Reuters and are reporting that the Libyan oil industry may come to a complete standstill in the next month. A rival Libyan government in Tobruk has shut down the nation's largest oil terminal, through which 75% of Libyan oil exports are loaded. In a case of economic blackmail, the Tobruk government is demanding concessions from the new national unity government.


What's up?

Since 2014, a civil war has raged in Libya between the elected centrist government, and the former Islamist government. The General National Congress, its Islamist militias and their tribal allies control the capital of Tripoli and western Libya, while the internationally recognized Council of Deputies, based in Tobruk, rules the eastern half of the country.

Terrorist with Daesh flag

(Between the two, along the central coast, is a Daesh branch called "the Islamic State of Iraq and the Levant - Libya Province". They control most cities and towns in that area. That's why the UN/US has gotten involved in Libya again.)

A UN-sponsored unity government, the Government of National Accord, arrived in Tripoli on March 30. The Islamist government in Tripoli has accepted the legitimacy of the new government, and has ceded control of government ministries in return for positions in the new government. Islamist militias still roam the capital, despite the dissolution of the GNC.

The Council of Deputies in Tobruk (which is technically still the elected Congress of the nation) has withheld its support for the new government until the fate of the Libyan Army (which is under CoD control) and its commander, Khalifa Haftar, is resolved. Article 8 of the UN-sponsored agreement forming the unity government states that all senior military positions will be reset, and a Minister of Defense will oversee all military matters. Not only that, but the CoD will have to share power with the Islamist parliament of the old Tripoli government.

In an attempt to win concessions, the CoD has blocked any western government sales of crude oil from loading at the country's main oil terminal in Marsa al-Hariga. When they tried to export oil under their own name, they were slapped with a UN embargo. This means no Libyan oil exports at all are leaving from Hariga.

Every storage tank in the region is predicted to reach maximum capacity in less than four weeks. Oil production in Libya will be shut down then, unless a political solution is found. The head of the Tripoli government's state-owned oil company revealed that not all effects of Tobruk stalemate will be temporary. He said that some production capacity could be lost permanently if oil from the southeast fields that is high in wax solidifies in pipelines.

The Western press is labeling the former good guys in Tobruk as bad guys, while the US and other Western powers learn on the CoD to give in. Whether they will do so before permanent damage is done to the nation's oil production is anyone's guess.

Ali Zifan [CC BY-SA 4.0], via Wikimedia Commons

Map of Spheres of Influence in the Libyan Civil War

Libyan Civil War Timeline

  • 2011: Libyan dictator Muammar Qaddafi is overthrown in a rebellion backed by NATO airstrikes.
  • 2012: elections are held for the first time in modern Libyan history. A centrist government (General National Congress) wins.
  • 2012-2014: The Muslim Brotherhood and various Islamist militias take control of the GNC. Sharia law is implemented.
  • 2014:  The GNC tries to cancel elections. Move met by violence and protests.
  • June 25, 2014: Centrists and secularists gain the majority of the seats in the national election. The new government is called the Council of Deputies.
  • July, 2014: The Islamists in the GNC refuse to step down. A bloody civil war immediately erupts.
  • October, 2014: The elected government flees Tripoli to Tobruk.
  • 2014-present: The two sides have been fighting each other, and the Daesh strongholds along the coast between them.
  • December 2015: The UN hosts representatives from both governments in a meeting in neighboring Tunisia to draft an agreement for a unity government. However, large portions of both the Tripoli and Tobruk governments refused to recognize the agreement.
  • March 2016: The unity government, know as the Government of National Accord, attempt to fly into Tripoli. The GNC Islamist government in Tripoli closes its airspace to prevent them landing. The GNA cabinet sneaks into Tripoli harbor and set up in a naval base.
  • April 2016: The GNC begins officially devolving national authority to the unity government, while militias continue to occupy Tripoli.
  • April 2016: Factions within the Council of Deputies loyal to General Haftar block a vote on recognizing the GNA government, demanding proposed Article 8 of the new constitution be removed.


The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product

About the Author

Everett Millman

Steven Cochran

Precious Metals Market Analyst
BS University of South Florida (2002)

A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.

Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt. He writes a monthly review of the precious metals markets for

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