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September 24, 2021

Banks Stopped Trading With Libya

Important oil companies and Wall Street banks have stopped trading with Libya in response to sanctions against the country, Wall street Journal informs. They are threatening a near-shutdown of exports from the North African country and driving oil prices even higher.

Morgan Stanley, which buys Libyan oil for its clients, has stopped buying because of sanctions announced last month, according to a person familiar with the matter. ConocoPhillips Co. said it isn’t exporting any of the 46,000 barrels a day of oil it normally produces in Libya. Exxon Mobil Corp. also said it is complying with the sanctions against Libya. A person familiar with BP PLC said the company wasn’t currently doing any new trading deals in Libya.

These changes are putting further strains on an already-volatile oil market, threatening to send gasoline prices higher around the world. Oil is already trading at its highest level in two and a half years as antigovernment protests sweep further across the Middle East, and worries increase that disruptions could spread from Libya to bigger producers like Saudi Arabia and Iran. Crude futures rose USD 1.02 per barrel, or 1 per cent, to USD 105.44 at the New York Mercantile Exchange on Monday.

Libya’s normal oil production of 1.6 million barrels a day has dropped by about two-thirds since the uprising against Col. Moammar Gadhafi broke out last month, costing the North African nation more than USD 100 million in revenue each day. The sanctions could prevent some buyers from taking the remaining oil that is flowing out of the country, the world’s 12th-largest oil exporter.

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