Financial losses over a protracted blockade of Libya’s vital oil fields and ports have rapidly swelled, surpassing $2 billion on Tuesday, the country’s National Oil Corporation said.
Oil supplies have become a major point of conflict between rival governments in the war-torn country. Powerful tribes loyal to Libya’s eastern-based forces seized large export terminals and choked off major pipelines last month, aiming to starve the U.N.-backed government of crucial revenues.
The financial impact has been swift and staggering, as production dropped from the typical 1.2 million barrels a day to about 120,000 this week, the corporation said in a statement on its Facebook page.
Field Marshal Khalifa Hifter’s forces, which control most of southern and eastern Libya, including the country’s main oil facilities, have been laying siege to the capital, Tripoli, since last spring.
The Tripoli government controls just a shrinking corner of the country’s west, but maintains the highly-valued authority over Libya’s central bank, which holds oil revenue.
The standoff over Libya’s main source of income has threatened to cripple the already battered economy and deprive the country of fuel supplies. Libya has the largest proven oil reserves in Africa.
At the latest Human Rights Council session in Geneva on Monday, the Tripoli government’s foreign minister urged the United States and other Western powers to intervene.
“The international community must demand the opening of the ports and fields to feed the people,” Mohamed Taher Siala told reporters.
Siala speculated that world powers are keen to stay silent over the contest because they don’t want to see a flood of oil production drive down market prices.
“If this is the reason, it is not human,” he said.
So far, the shutdown has not caused major upheaval in the world oil market, according to Antoine Halff, a Columbia University researcher and chief analyst at Kayrros, an energy data analytics company.
This is mostly because Libya’s light crude oil directly competes against U.S. shale oil production, he said, allowing major buyers, like Italy, Spain and China to access U.S. oil instead.