Libya's Oil Crisis: Political Standoff Halts Major Production

More than half of Libya's oil production has been halted due to a standoff between rival political factions over control of the central bank and oil revenue. This conflict threatens to end a four-year period of relative peace in the country. Production has dropped significantly in key oilfields.

More than half of Libya's oil production, equivalent to around 700,000 barrels per day, was offline on Thursday. The disruption is a result of a standoff between rival political factions concerning control over the central bank and oil revenue, jeopardizing four years of relative peace.

Output at oilfields managed by Waha Oil Company, a subsidiary of the National Oil Corporation, has plummeted to 150,000 barrels per day from 280,000 barrels per day. Engineers told Reuters on Thursday that further declines in production are expected. Production has also been halted or reduced at the Sharara, Sarir, Abu Attifel, Amal, and Nafoora fields.

This disruption has removed approximately 700,000 barrels per day of oil output, according to Reuters calculations. Libya pumped around 1.18 million barrels per day in July. Eastern factions have vowed to keep oil production shuttered until the internationally recognized Presidency Council and Government of National Unity in Tripoli restore veteran central bank governor Sadiq al-Kabir to his position.

(With inputs from agencies.)