On August 26, the eastern Libyan government announced that all oil fields, ports, and petroleum facilities would halt production and exports due to "force majeure" in response to the Tripoli government's attempts to take over the central bank. Libya, holding the largest oil reserves in Africa, has faced political instability since 2011, impacting its oil industry. This dispute involves the control over the central bank, affecting the management of billions of dollars in oil revenue.
Citigroup analyst Francesco Martoccia pointed out that Libya's economy is highly dependent on oil revenue, and whoever controls the management of funds holds the economic dominance. This struggle has become the core of factional conflicts, with each side defending its economic interests. As the situation remains turbulent, the risk of disruption in the supply of light, low-sulfur crude oil increases, potentially pushing Brent crude prices up to the $80-$89 per barrel range.
UBS analyst Giovanni Staunovo stated that if this situation continues, the spot market will remain tight, making it difficult to estimate the duration of supply interruptions.
Meanwhile, tensions in the Middle East are also rising. On August 25, Lebanon and Israel attacked each other’s targets, sparking concerns about regional warfare. On August 26, Iranian Foreign Minister Araghchi announced on social media that Iran would respond definitively and planned to Israel's "terrorist acts." Iran does not fear the escalation of tensions, but it also does not seek to expand the situation.
