North Africa

Libya faces financial crisis due to oil blockade

Libya will face a financial crisis and a budget deficit in 2020 because of a blockade of oil terminals and oil fields by groups loyal to eastern-based commander Khalifa Haftar, Reuters reported the head of Libya’s internationally recognised government as saying on Saturday.

The North African country’s oil output has fallen sharply since January 18 when the blockade started. State-run National Oil Corporation (NOC) said on Thursday crude output had dropped to 163,684 barrels per day.

“Certainly, in light of the continued closure of oil facilities, the 2020 budget will face a deficit and (it) will drop to its lowest levels,” Tripoli-based Libyan Prime Minister Fayez al-Serraj told reporters.

Serraj echoed the NOC figures, saying that the country had lost more than $1.4 billion since the start of the blockade.

The Libyan National Army led by Haftar and forces aligned with the internationally recognised Government of National Accord (GNA) in Tripoli have been fighting since April last year for control of the capital.

Fighting has continued despite a call for a truce by Russia and Turkey starting on January 12 and an international summit on Libya in Berlin on January 19 aimed at reducing international interference.

“We warned against using oil as a pressure card,” said Serraj, adding that his government had started legal action to hold those who blockade the oil accountable. He gave no more details.

The NOC warned earlier that oil output would eventually fall to 72,000 bpd if the blockade continued, from about 1.2 million bpd previously.

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