General Khalifa Haftar, Libya's military strongman, recently handed control of key oil facilities in the east to allies.
On Tuesday, Mustafa Sanallah, the head of Libya’s National Oil Company (NOC), said any company that tried to buy oil from the eastern authorities would be sued. "Exports by parallel institutions are illegal and will fail as they have failed in the past", Presstv Reported.
“There is only one legitimate NOC, recognised by the international community and OPEC,” Sanallah said, in reference to a rival NOC set up in the main eastern city of Benghazi.
The self-styled Libyan National Army (LNA) of Haftar announced on Monday that all future revenues from oil ports which it controls will be handed to the unrecognized administration in the east.
Haftar took the surprise decision to hand control of the eastern export terminals to the Benghazi-based NOC instead of the internationally recognized state oil firm after his forces recaptured two of them. Haftar’s decision on Monday dealt a major blow to international efforts to preserve Libya’s unity through the Tripoli-based Government of National Accord (GNA).
The NOC chief also urged Haftar to reverse his decision for the sake of national unity, saying, “The LNA leadership has missed an excellent opportunity to act in the national interest.”
The Benghazi-based authorities made a similar attempt to bypass the Tripoli government in April 2016 but their planned sale of 300,000 barrels per day of crude was stopped by the UN Security Council.
"UN Security Council resolutions are very clear, oil facilities, production and exports must remain under the exclusive control of (Tripoli-based) NOC and the sole oversight of the (internationally- recognised) Government of National Accord," Sanalla said, adding, "We are confident that the GNA and our international partners will take the necessary steps to stop all exports in breach of international law."
In recent weeks, a series of fierce clashes between rival armed groups in eastern Libya's key oil export ports has caused output to drop by nearly half. Global oil prices have already surged in the wake of a decision by US President Donald Trump to abandon a multinational nuclear deal with Iran in May.
LNA is currently the dominant force in eastern Libya although groups like the Benghazi Defense Brigades and those loyal to Jadhran continue to challenge LNA’s clout.
Haftar, a general under Gaddafi, has been mostly opposed to United Nations efforts to establish a unity government in Libya. He has openly challenged the rule of one such administration in the capital Tripoli since it was established in 2015 while his forces continue to remain close to the rival government and parliament in the east of Libya.
Haftar and LNA have been backed by certain Arab governments, including the United Arab Emirates and Libya’s neighbor Egypt, while governments in Europe that once contributed to a NATO military operation to oust Gaddafi have also offered Haftar some diplomatic support.