Oil blockade: Libya faces financial crisis, budget deficit

by MCR Correspondent
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Fayez al-Sarraj, the head of Libya’s internationally recognised government, has warned the country against financial crisis and budget deficit.

The warning was triggered by the blockade of oil terminals in the North African country.

“The continuation of the shutdowns will result in a catastrophic financial crisis,” al-Sarraj told reporters in the capital, Tripoli.

“Losses from the oil shutdowns have exceeded $1.4bn. The figure is increasing every day,” he added.

The state-run National Oil Corporation (NOC) stated on Thursday that crude output had dropped to 163,684 barrels per day (bpd).

Oil is the main source of national income for the country and before the blockade, Libya was producing 1.2 million bpd.

“Certainly, in light of the continued closure of oil facilities, the 2020 budget will face a deficit and it will drop to its lowest levels,” al-Sarraj noted.

Libya has been mired in chaos since 2011 when a NATO-backed uprising toppled longtime leader Muammar Gaddafi. The country is now split into rival administrations in Tripoli and the east.

Most of Libya’s oil facilities are in areas controlled by forces loyal to Haftar, who has gradually expanded his power over the past six years with the help of foreign allies, including the United Arab Emirates, Egypt and Russia.

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