Mohamed Aoun, the Minister of Oil and Gas in Libya’s Government of National Unity (GNU), has expressed his concern over the recurring calls for suspending the country’s oil production.
As reported by the Al-Sharq Awsat newspaper, Aoun warned that “such interruptions could have a considerable detrimental impact on the country.”
Aoun emphasized that “ordinary Libyan citizens would be the first to feel the repercussions should oil production cease, through the potential loss of international oil-importing clients or the damaging effects on power stations,” painting a bleak picture of the situation.
He further cautioned about the “grave repercussions of shutting down any ports or oilfields.” Given that Libya currently produces a substantial volume of oil, approximating 1.2 million barrels per day, coupled with a daily gas output of 2.7 billion cubic feet, of which 300 million cubic feet is exported; the implications of such actions could be far from minor.
The Minister continued, explaining that “a cessation in crude oil supply would inevitably disrupt gas production as well, adversely impacting the nation’s power stations. Therefore, Libyan citizens would be the primary victims of such a decision, feeling the effects even before oil-importing countries, who may seek alternative sources.”
Aoun also clarified that “the repeated threats of oil cessation could potentially result in the irreversible loss of oil-importing clients.”
This concern arises from their apprehension about the stability of supplies, and Libya’s capability to meet contract commitments, with the looming possibility of reverting to force majeure declarations. Such conditions might force them to seek alternatives, despite the prevailing global energy crisis, which is currently worsened by the ongoing conflict in Ukraine.
Libya is a North African country rich in oil and gas reserves, making it a key player in the global energy market. With the largest proven oil reserves in Africa, Libya has long been a major exporter of oil. However, the country’s oil and gas industry has been heavily impacted by political instability and conflicts since the Arab Spring and the overthrow of Muammar Gaddafi in 2011.
Following Gaddafi’s downfall, Libya descended into years of violence and factional power struggles. This turmoil has significantly affected oil production, which frequently became a tool of political bargaining and a source of funding for different warring factions. Numerous instances of blockades and shutdowns of oilfields and ports have occurred over the years, severely disrupting the country’s oil exports.
In an effort to mitigate the political chaos and establish a united government, the Libyan Political Dialogue Forum (LPDF) agreed to form the GNU in 2021. Aoun was appointed as the Minister of Oil and Gas, and tasked with managing the critical oil and gas sector. This comes amid ongoing political uncertainties and external pressures, including global energy crises.
Currently, Libya is trying to return to full production capacity, while also grappling with potential threats of renewed disruptions. Aoun’s recent comments underscore the detrimental impact of halting oil production on both the Libyan economy, and its people. As well as reflect on the complexities of managing an oil-dependent economy in a context of political instability.
