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World oil prices down on Libyan ports agreement

© AFP (file picture)

Text by FRANCE 24

Latest update : 2014-04-07

Rebellious port guards in control of Libya’s main oil terminals have agreed to end an eight-month standoff with the government, pushing oil prices down on Asian markets on Monday.

The agreement signed on Sunday night between Libyan rebels occupying four eastern oil ports and the government should end the blockade that has cost the North African state billions in lost revenues since last July.

Zueitina and Hariga ports, held by federalist rebels demanding more autonomy from Tripoli, will open immediately while the larger ports, Ras Lanuf and Es Sider, will be freed in two to four weeks after more talks, the government said.

“The protesters are banned from returning or obstructing work at the ports,” Justice Minister Salah al-Marghani said, reading out the agreement.

Top rebel leader Ibrahim Jathran confirmed the blockage of Zueitina and Hariga had ended. “We did this out of goodwill to build trust, have a dialogue and solve all problems between Libyans by peaceful means,” he said in a short speech broadcast by a rebel television station from Zueitina terminal.

The shutdown has cost the state more than $7 billion in lost oil revenues. Parliament has failed to approve a budget for 2014, as there is almost no state income at the moment.

Rebel leader Ibrahim Jathran, who seized three of the ports with thousands of his troops, is a former anti-Gaddafi fighter. He later became head of a state-run oil facilities guard before he turned against Tripoli.

Rebel demands

Jathran’s movement set up its own self-declared federal government in the east, where many feel they have long been neglected by Tripoli. They made three key demands on the government: a system to share oil revenues, a probe into corruption and a committee to oversee oil exports.

The two latter demands were granted in the agreement. The government said it also included an amnesty and payment of salaries for the oil guard force.

However, the sharing of oil revenues between the central government and the east of the country remains to be discussed.

Negotiations accelerated after the federalists failed to export oil independently from the government last month. US commandos boarded the tanker the rebels had loaded with crude and returned it to Libya, in a major blow to their plan to bypass Tripoli.

Ending the oil port standoff will be a major advance for Libya’s fragile government, which has struggled to impose its authority over an unruly nation still in flux nearly three years after the fall of Muammar Gaddafi.

Zueitina and Hariga ports account for around 200,000 barrels per day of export capacity, while the larger ports previously shipped around 500,000 bpd of Libya’s crude.

Crude prices dropped in Asian trade on Monday after the agreement was reported.

New York’s main contract West Texas Intermediate (WTI) for May delivery dropped 30 cents to $100.84 a barrel in afternoon trade and Brent North Sea crude for May slid 80 cents to $105.92.

“There are more indications that the negotiations are likely to achieve a breakthrough, resulting in further trimming of prices,” Tan Chee Tat, an analyst at Phillip Futures in Singapore told AFP.

(FRANCE 24 with AFP, Reuters)

Date created : 2014-04-07

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