Bloomberg reports on the chaos enveloping Libya after Barack Obama and Hillary Clinton unwisely used American military might to create a power vacuum in the country. Islamic extremists have captured Tripoli and warfare is creating oil field stoppages.
Libya’s National Oil Corp. declared force majeure at the ports of Es Sider and Ras Lanuf and will halt output at some oil fields because of fighting in the politically divided North African country.
Armed factions should spare energy infrastructure in Libya, the state-run producer said in a statement on its website. Force majeure is in place at Es Sider and Ras Lanuf, Libya’s largest and third-largest oil ports, with a combined capacity of 560,000 barrels a day. The measure is a legal status that protects a company from liability when it can’t fulfill a contract for reasons beyond its control.
National Oil, known as NOC, didn’t identify the fields to be halted. NOC is adopting measures to protect wells, pumps and pipelines.
Force majeure has been declared at the two oil ports “because of the ongoing armed clashes in the area,” it said Dec. 13. NOC “is determined to protect the oil resources of the country in a way that protects the rights of the country and the partners in line with terms of the partnership agreements.”
Brent crude, a pricing benchmark for more than half of the world’s oil, added 50 cents to $62.35 a barrel on the ICE Futures Europe exchange at 1:20 p.m. Singapore time. The contract on Dec. 12 closed at the lowest level since July 2009.
Libya, holder of Africa’s largest oil reserves, is divided after its internationally recognized government, led by Abdullah al-Thinni, sought refuge in the country’s eastern region since Islamist militias took over Tripoli about four months ago. Omar al-Hassi set up a rival government in the capital with the backing of the militants. Plans for Thinni’s government to take control of oil revenue could prompt rivals to disrupt shipments, Eurasia Group analyst Riccardo Fabiani said by e-mail Dec. 12.
Libya is producing about 800,000 barrels a day of crude, NOC spokesman Mohamed Elharari said Dec. 8. Libya had output of about 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.