Libya’s oil industry is in disarray as the world needs it more than ever

Libya’s oil ministry told CNN on Wednesday that June production fell to nearly 100,000 bpd from 1.2 million bpd last year. But oil minister Mohamed Oune told CNN on Monday that production had risen to 800,000 barrels a day, saying some fields had returned to production.

U.S. Ambassador to Libya Richard Norland told CNN on Thursday that due to political tensions in the country, “there are certain parties who are looking to gain an advantage by distorting oil production data.” He said earlier data provided by the oil ministry was “inaccurate,” adding that “actual production is significantly higher.”

Here’s what you need to know about Libyan oil:

What is the importance of Libyan oil?

The North African country holds 3% of the world’s proven oil reserves, said Yousef Al Shammari, CEO and head of oil research at CMarkits in London. As long as he is a member OPEC oil cartelit is not bound by production restrictions due to the political crisis it is facing, which means it can produce and export as much oil as it wants.

Its proximity to Europe means it can easily transport oil by sea over much shorter routes than other producers, he said, and most of its oil is exported to European countries.

What is the biggest obstacle to oil production in Libya?

The belligerents in the country used oil as a lever in the struggle for power. The political standoff between rival governments in the east and west has led armed groups backing the eastern government to take control of the oil facilities and shut them down. repeatedly.

The UN-backed Government of National Unity (GNU) sits in the capital, Tripoli, and is led by interim Prime Minister Abdulhamid Dbeibeh. To the east is a rival, parliamentary-elected government led by Fathi Bashaga.

Much of Libya’s oil fields and infrastructure is in the country’s east, where Commander Khalifa Haftar and his Libyan National Army (LNA) have armed control. He is associated with the Bashagi government.

Who is responsible for oil production?

On paper, the Tripoli-based National Oil Corporation (NOC) is an organization tasked with overseeing production and selling the nation’s oil abroad.

The Middle East will not save Europe if it cuts off Russian oil

Warring parties in the east and west have been trying to seize control of the NOC since 2014, but the sector is controlled by Oil Minister Mohammed Oun, who belongs to the UN-backed government in the west.

But his influence is weak, says Libyan analyst Jalel Harshawi, and he is involved in a power struggle with the NOC, which “goes to great lengths” to maximize output.

CNN was unable to reach the NOC for comment.

On the ground, however, Khalifa Haftar, who is based in the east, is mostly in command, Harshawi said. Armed brigades under his command stopped production several times.

What is the role of foreign parties?

Oil Minister Oun blamed foreign powers with competing interests for the political crisis in Libya. “There should be an agreement between them on the best ways to a mechanism that will get Libya out of this crisis,” he told CNN.

Haftar was supported by Egypt, the United Arab Emirates and Russia.

Wagner Group, a Russian private military contractor, entered Libya in 2019 in what the UN said was an attempt to support Haftar and his LNA. Experts say several hundred Russian troops have been deployed around the largest oil fields.

In 2020, at the height of his involvement, Wagner seized control of Libya’s Sharara oil field, one of the largest. The takeover also helped Haftar maintain the blockade of oil exports. The presence of Russian personnel gives Moscow the opportunity to cut off oil supplies to Libya if it so desires, Harshaoui said.

U.S. Ambassador Norland said the fall in production in Libya “is undoubtedly serving Russia’s interests, and Moscow, without a doubt, supports this,” but attributed the current disruption to “internal Libyan factors.”

Is oil encouraging the West to return to Libya?

Earlier this month the British Embassy answered in Tripoliand in March, the US proposed a mechanism to oversee Libya’s oil revenues to resolve a political crisis that is disrupting production.

Political approval of the mechanism has yet to follow, but the Libyan parties have agreed in principle on “certain areas of priority spending,” Norland, who lives in Tunisia, said.

Asked if the US trusted the UN-backed government to return stable production, Norland said that “no single political entity exercises sovereign control over the entire territory of Libya, including the oil fields.”

Digest

White House says Biden’s meeting with Saudi officials ‘will include’ crown prince

The White House said Sunday that President Joe Biden’s upcoming meeting with Saudi Arabian officials “will include” the kingdom’s crown prince Mohammed bin Salman, hours after Energy Secretary Jennifer Granholm suggested a one-on-one meeting.

  • Background: Granholm told CNN Sunday she “understood” Biden would face the crown prince one-on-one next month during his scheduled trip to Saudi Arabia. On Friday, Biden said he would not meet with MBS, but that the crown prince would attend an international meeting.
  • Why is it important: With Russia’s invasion of Ukraine, the global surge energy prices and the growing nuclear threat from Iran, the US is trying to repair its relationship with Saudi Arabia and the Gulf states. Biden’s upcoming trip to Saudi Arabia complicates the president’s pledge to make the country a “rogue” for its role in the murder of Saudi journalist Jamal Khashoggi.

Iran says it’s ‘too early’ to say Tehran and Riyadh will reopen embassies

It would be premature to say Iran and Saudi Arabia will reopen embassies in each other’s capitals, an Iranian foreign ministry spokesman said on Monday after five rounds of talks since last year between the rivals to improve relations.

  • Background: Riyadh severed ties with Tehran in 2016 after Iranian protesters stormed the Saudi embassy in the Iranian capital following the execution of a Shiite cleric in Saudi Arabia. In April, they held the fifth round of talks in Iraq, and this month the first batch of 39,635 Iranian pilgrims authorized to perform the Hajj in Mecca arrived in Saudi Arabia.
  • Why is it important: The warming of relations between them can significantly reduce regional tensions. In a telephone conversation with his counterpart from the United Arab Emirates on Saturday, Iranian Foreign Minister Hossein Amir-Abdollahian “pointed to the priority of neighbors in Iran’s foreign policy and called for additional consultations … to expand bilateral ties.”

Bahrain will start accepting the Russian Mir payment card

Bahrain’s ambassador to Russia, Ahmed Al Saati, said his country would soon begin accepting Russia’s Mir payment card, Russian news agency RT reported. The ambassador said the move would allow Russian tourists to spend their holidays in Bahrain.

  • Background: Russia created its own card payment system in 2014, fearing that U.S. and European sanctions against some Russian banks and businessmen over its annexation of Crimea could block transactions made with U.S. Mastercards and Visas. A total of 116 million cards were issued.
  • Why is it important: The recent exclusion of large Russian banks from the SWIFT messaging system means that it is difficult for customers to conduct their business outside of Russia. Embracing “Peace” will help cushion that blow. Countries currently hosting Mir: Turkey, Vietnam, Armenia, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, South Ossetia and Abkhazia.

By region

A man celebrates the end of the annual Wadi Zalaga camel race by firing a rifle in Sinai, Egypt.

The controversial practice of holiday shootings in the Middle East has received renewed attention after a child was killed in Egypt by a stray bullet from a former politician’s pistol.

A court in Egypt banned the use of weapons at celebrations late last week. local news outlets. The decision came after a former member of parliament fired a pistol at a wedding in Buhaira province, killing a child who was watching from his balcony. The former politician’s gun license has since been revoked.

The new regulation gives authorities the power to deny, revoke, suspend or reduce gun licenses at their discretion.

Holiday shooting casualties are not uncommon in the Arab world. On New Year’s Eve last year, a Syrian refugee in Lebanon was killed and a plane at Beirut airport was hit holiday shooting. In September, top soccer player Mohammed Atwi was killed by a stray bullet during the funeral of a 2020 Beirut bombing victim.
The celebration of firearms following Jordan’s 2020 parliamentary elections was met with widespread condemnation, prompting King Abdullah to speak out. Have tweeted at the timestating that “the tragic scene we saw from some individuals after the electoral process is a clear violation of the law.”

Jordanian television channel al Mamlaka TV estimates that between 2013 and 2018, up to 1,869 people died in the country as a result of celebratory shootings.

Mohammed Abdelbari

Photo of the day

A boy prepares to jump off the roof of a structure to cool off in the waters of the Shatt al-Arab waterway, formed at the confluence of the Euphrates and Tigris rivers, in the city of Basra in southern Iraq, near sunset.  June 18th.