Libya is facing a political crisis that is jeopardizing its oil production, reminiscent of the chaos that followed the overthrow of Moammar Gadhafi. Last week, the country’s crude output was halved as eastern authorities closed more than 500,000 barrels a day amid a power struggle with the Tripoli-based government over control of the central bank. All eastern export terminals were shut down on Thursday, and the disruption could escalate to 1 million barrels a day, representing about 1% of global supply, according to experts at Rapidan Energy Group. This would also signal a breakdown of the 2021 UN-brokered political agreement aimed at reconciling the rival factions.
The implications of this crisis are significant, not only for Libya but also for the global oil market. The uncertainty surrounding the country’s oil production adds a new layer of complexity to an already volatile market. It remains to be seen how the situation will unfold and what impact it will have on both Libya’s political landscape and the world economy.
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