ICG: Libyan oil not yet spared from political crises

Aug. 9 (UPI) -- Crises curbing exports and production in Libya's oil belt have abated, but the underlying issues remain unresolved, the International Crisis Group reported.

Libyan instability re-emerged as a market concern in June when two of the storage tanks at the Ras Lanuf port suffered catastrophic damage during militant attacks. The U.N. backed National Oil Corp. said reconstruction efforts could take several years, especially considering the tense security situation in the country.

Later, the NOC suspended the loading of crude oil at the Zawiya port in western Libya after unknown assailants kidnapped employees at the Sharara oil field. Of the four taken initially, two were released.

In July, the corporation rejected a move by the Libyan National Army to move on exports from the Gulf of Sirte. U.N. Security Council resolutions recognize the NOC as the legitimate authority in the country.

NATO members issued a statement of support for the NOC after the standoff ended.

"The nearly month-long standoff over crude oil export terminals in eastern Libya is over," a report from the International Crisis Group read. "But another could soon emerge if the underlying causes of the conflict are not addressed."

The ICG's report identified government unity as elusive given the mounting distrust running in leadership circles since the end of civil war. For some form of political agreement to take place, the group said everything from more transparency at the nation's central bank to a larger footprint from the U.N. mission may be necessary.

Libyan crises have been supportive of spikes in the price of crude oil. Secondary sources reported to economies at the Organization of Petroleum Exporting Countries put Libyan oil production at 708,000 barrels per day on average for June, the last full month for which data are available. That was down 26 percent from the previous month.