Libya's Oil Corporation: Blockade Losses Exceed $1.3 Billion

CAIRO -- Economic fallout continues from the shutdown of Libya’s vital oil fields, with losses surpassing $1.3 billion, the national oil corporation announced Tuesday.

The latest contest over oil assets in Libya started last month, when powerful tribes loyal to eastern-based forces laying siege to the capital, Tripoli, seized large export terminals and choked off major pipelines. The brazen move came just days before Germany hosted a high-profile international summit aimed at ending end Libya's long-running conflict.

Allies of Khalifa Hifter’s eastern forces, which control the vast oil reserves of southern and eastern Libya, are looking to gain political leverage and cripple the embattled U.N.-backed government in Tripoli by slashing a main source of its revenue.

The Tripoli government controls only a shrinking corner of the country’s west. But it enjoys a different advantage: its control over Libya’s Central Bank, which holds the country’s oil revenue.

The opaque finances of the bank has drawn sharp criticism. Hifter’s forces accuse the bank of diverting oil assets to pay Syrian mercenaries to defend the capital. The oil corporation has also called repeatedly for increased transparency.

In a statement this week, the cash-strapped bank reported it had not received any oil revenues for the month of January. With that income gone, it said it would postpone the payment of all government salaries.

The Tripoli government’s finance ministry rolled out a series of vague reforms Tuesday toward “regulating” its management systems to “ensure fiscal prudence.” The announcement reflected mounting pressure on the government to hold its public financial institutions accountable.

The tug-of-war over Libya’s oil revenues has been going on for years. Even so, recent losses are dramatic. The national corporation said current production, which has collapsed to roughly 183,000 barrels a day from about 1.2 million, is at the lowest point since the 2011 uprising that ousted and killed long-time dictator Moammar Gadhafi.

The corporation reiterated its warning that the blockade is quickly depleting fuel that supplies Libyan power stations. The tribal groups closed yet another pipeline over the weekend, exacerbating a looming fuel crisis, the statement added.

Hifter’s forces have been waging an offensive on Tripoli since April. An aspiring strongman with an anti-Islamist bent, the commander has drawn the support of the United Arab Emirates and Egypt, as well as France and Russia. On the other side, Turkey, Italy and Qatar back the Tripoli administration.

The international sponsors have pledged to uphold a widely flouted U.N. arms embargo and push a cease-fire. Regardless, weapons keep pouring into the war-ravaged country in what U.N. chief Antonio Guterres has bluntly called “a scandal.”

Powerful Western countries, like the United States, have come under criticism for failing to take a strong stance.

In a meeting with the Tripoli government’s interior minister late Monday, U.S. envoy to Libya Richard Norland “reaffirmed U.S. support for ongoing efforts by Libyan authorities to dismantle and disarm militias," which he said pose a “serious threat” to national unity.

The statement's apparent reference to disbanding armed groups defending Tripoli strongly evokes Hifter's previous demands. Despite ostensible American recognition for the U.N.-backed government, President Donald Trump called to commend Hifter last spring after he launched his assault on the capital.