Wednesday, 4 May 2011

Some Libyan oil still being exported

One fortunate feature of the present situation in Libya is that some oil is being exported (while petroleum products were successfully imported by the regime) and that, despite the freezing of Libyan financial assets, acute foreign exchange shortages have not yet arisen.

The viability of many of the recently started industries and service sector facilities is, however, questionable because them current complex situation is unlikely to be revolved in the immediate future. There is, nonetheless, potential for the payment in foreign exchange for imported goods and services but this will involve risks for any company breaking international sanctions against the regime.

An agreement approved on 27th April by the US Treasury Department's Office of Foreign Assets Control (OFAC) gave permission for the marketing of oil by the rebels using the good offices of Qatar Petroleum and the assistance of Vitol, one of the world's largest independent oil traders.

US Ambassador Gene Cretz welcomed the arrangement and the demonstrably improved American links with the Interim Transitional National Council (ITNC). He talked in terms of co-operation which would open a new phase in relations between Libya and US.

The report from the market in Tripoli is that great caution is being exercised by owners of shares and property and that the market is, by and large, very depressed. Foreign companies entering the Libyan market at this stage must expect very tough trading conditions.

Foreign Minister Abdelati Obaidi was preparing for a major mission to the EU states to take place in the immediate future. This mission has, however, been shelved as a result of the orchestrated attacks by Libyan mobs on the foreign embassies which has dashed hopes for an orderly end to the crisis.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2011 Menas Associates

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