Libyan Oil Exports Blocked Ahead of Berlin Peace Conference

Salma El Wardany

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Libyan commander Khalifa Haftar blocked oil exports at ports under his control, slashing output by more than half and posing a potential setback for an international conference on Sunday that aims to broker an end to a civil war in the OPEC nation.

As a result of the blockage of ports in the central and eastern parts of the country, oil output will fall by about 800,000 barrels a day, costing $55 million daily, the National Oil Corp. said in a statement on Saturday. The NOC declared Force Majeure, which can allow Libya, which holds Africa’s largest-proven oil reserves, to legally suspend delivery contracts.

The show of force comes as Haftar prepares to attend an international conference in Berlin hosted by German Chancellor Angela Merkel where the general will face pressure to agree to a cease-fire. Haftar, whose troops have been bogged down in the southern suburbs of the capital of Tripoli, has so far refused efforts to end his offensive and agree to a compromise.

“The ports closure is an attempt by Haftar to condition the negotiations in Berlin,” said Arturo Varvelli, head of the Rome office and a senior policy fellow at the European Council on Foreign Relations. “It could be counterproductive as it could make the Europeans, who are the largest consumers of Libyan oil, very upset.”

The NOC said Haftar’s forces caused the shutdown. Companies involved with the Brega, Ras Lanuf, Hariga, Zueitina and Sidra ports received orders from the general command of the LNA and the Petroleum Facilities Guard to freeze the shipments, the NOC said. LNA spokesman Ahmed Mismari said in a statement overnight that the ports were being closed in response to the demands of Libya’s people, after eastern tribes staged protests demanding oil production be stopped.

By shutting down the oil fields, Haftar is denying a key source of revenue to the internationally elected government of Prime Minister Fayez al-Sarraj. Funds from oil production go the country’s central bank and have been used by Tripoli to buy weapons for its defense.

An earlier round of peace talks held in Russia this week broke down after Haftar rejected a proposed truce agreement that had already been signed by Sarraj. The commander abandoned Moscow early Tuesday after refusing to stamp the deal that had been brokered by Russia and Turkey, which supports Sarraj’s government.

Russian mercenaries have supported Haftar’s forces, according to officials who told Bloomberg. Egypt and the United Arab Emirates are also backing Haftar. Former colonial power Italy also has a military training mission numbering several hundred troops in the country. Turkish soldiers are training forces loyal to Sarraj, and Turkish-backed Syrian rebels have also joined the fray.

Russia and Turkey, which have assumed increasingly assertive roles in the Libyan conflict as they jockey for influence in the Mediterranean, brought Libya’s feuding leaders to the talks after concluding their intervention in the country was too costly.

Haftar will face additional pressure at the Berlin conference. Apart from Russian President Vladimir Putin and Turkish Leader Recep Tayyip Erdogan, French President Emmanuel Macron, U.K. Prime Minister Boris Johnson, Italian Prime Minister Giuseppe Conte and U.S. Secretary of State Michael Pompeo are expected to attend.

Erdogan told supporters on Saturday in Istanbul that “Turkey will continue to stay in Libya until the legitimate government is brought to safety.”

Germany would be willing to contribute to any peacekeeping force once a durable cease-fire is in place, Annegret Kramp-Karrenbauer, the head of Merkel’s party and the country’s defense minister, told reporters on Saturday in Hamburg.

(Adds details on shutdown in fifth paragraph)

--With assistance from Samer Khalil Al-Atrush, Alberto Brambilla, Arne Delfs and Constantine Courcoulas.

To contact the reporter on this story: Salma El Wardany in Cairo at selwardany@bloomberg.net

To contact the editors responsible for this story: Andrew Davis at adavis@jefferies.comMichael Gunn, Andrew Davis

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