U.S. hits Libyan oil with sanctions

WASHINGTON, March 23 (UPI) -- All governments should stop working with the Libyan National Oil Corp. so as to cut off finances to Libyan leader Moammar Gadhafi, Washington said.

The U.S. Department of the Treasury's Office of Foreign Assets Control announced that 14 companies owned by the Libyan National Oil Corp. were subject to economic sanctions.

"The Libyan National Oil Corp. has been a primary funding source for the Gadhafi regime," said OFAC Director Adam Szubin in a statement. "Consistent with U.N. Security Council Resolution 1973, all governments should block the National Oil Corp.'s assets and ensure that Gadhafi cannot use this network of companies to support his activities."

Resolution 1973 authorized the use of military force in Libya to protect civilians from attack by forces loyal to Gadhafi.

OFAC identifies the Libyan National Oil Corp. as the "centerpiece" of the country's oil sector. The agency said it would consider authorizing future dealings with the company should it or its subsidiaries come under different ownership and control.

Crude oil was trading near post-recession records in part because of the shutdown of production in Libya, one of the world's top oil producers. This comes despite assurances from Saudi Arabia and Russia that they could make up for shortfalls.