In a news article published by MbS News concerning the security and political instability in Libya, as well as the stoppage of oil production as a result of the conflict around the capital, MbS news raised the issue of Libya’s alternatives to compensate for this blockade, and stated the sectors that are affected by this stoppage, as oil sector in Libya is almost the only source of income for the state.
Mbs News stated that, according to data from the National Oil Corporation, crude production decreased to 163.6 thousand barrels per day by February 13 as a result of the closure of production fields, ports and pipelines. In other words, the losses exceeded the amount of one billion US dollars.
“On the other hand, opinions differ on the losses resulting from the closure of oil fields, and the feasibility of continuing the production process.” NbS stated.
For instance, the Libyan oil expert Issa Rashwan claimed that oil is the only resource for Libya, as it represents about 95% of the country’s income, stressing that the loss is represented in the “loss of the sale”. Yet, “there are question marks around some numbers due to the lack of transparency and the absence of good governance, as there are no accurate statistics on oil sales and revenues,” he emphasized.
As far as the sectors affected by the closure are concerned, Rashwan explained that the Libyan state has three alternatives to compensate for the oil sales deficit. First, gas sales. Second, the income of the investment institution. Last but not least, foreign exchange reserves in the Central Bank.
While MP Mohammed Al-Abani stated that more than 93% of the Libyan output is represented by oil production located in the oil Crescent area that is under the control of the Libyan army, which does not receive any of these revenues, confirming that “stopping oil production means stopping the extraction of Libyan oil from the ground, and the proceeds going to finance the militias.”