Eastern Libya Shuts Down Oilfields Amid Escalating Power Struggle

Eastern Libya's government has announced the closure of all oilfields, ceasing production and exports. The National Oil Corp (NOC) and its subsidiary Waha Oil plan to reduce output, citing protests. This move intensifies the power struggle between eastern and western factions and threatens Libya's economic stability.

The government in eastern Libya has declared the shutdown of all oilfields, ceasing production and exports without confirmation from the internationally recognized government in Tripoli or the National Oil Corp (NOC), which controls Libya's oil resources.

Waha Oil Company, a NOC subsidiary, announced plans to gradually reduce output, warning of a complete production halt due to protests and pressures. Waha operates a joint venture with TotalEnergies and ConocoPhillips and has a production capacity of approximately 300,000 barrels per day (bpd), exporting through Es Sider port. It manages five main fields, including Waha, Gallo, Al-Fargh, Al-Samah, and Al-Dhahra. Most oilfields are under Khalifa Haftar's Libyan National Army (LNA) control.

Amid the power struggle between Libyan factions over the central bank and oil revenue, the Tripoli-based Central Bank of Libya (CBL) suspended domestic and international operations due to disturbances, having temporarily shut down last week following a senior bank official's kidnapping. The NOC also declared force majeure at the Sharara oilfield earlier this month due to protests, reducing Libya's oil production from about 1.2 million bpd to potentially just 130,000 bpd if eastern production halts.

(With inputs from agencies.)