Libya Rebels Threaten Eastern Ports That Signaled Oil Revival

Rebels blocking oil shipments from eastern Libya threatened to occupy two ports just weeks after they restarted cargo loadings, jeopardizing a revival in shipments from the North African country.

The port of Zueitina shipped its first cargo since July on May 4, about three weeks after a similar resumption from Hariga farther east. The restarts followed an April 6 accord between rebels and the government and were a precondition for the return of Es Sider and Ras Lanuf, the east’s biggest oil ports.

“We may cancel the agreement altogether, whether it’s about the handing over of Zueitina and Hariga or the talks that were planned to hand over Es Sider and Ras Lanuf,” Ali Al-Hasy, a spokesman for self-declared Executive Office for Barqa, or Cyrenaica region, said by phone today. The action would be a response to the election of Ahmed Maitiq as Prime Minister, according to Al-Hasy.

Eastern Libya federalists agreed last month to hand over control of Zueitina and Hariga to the central government in exchange for an amnesty and the payment of salaries to defectors from Libya’s Petroleum Facilities Guard. Another round of talks with the government was planned for them to hand over the ports of Es Sider and Ras Lanuf.

Oil output in Libya slumped more than 80 percent since the start of the uprising against Muammar Qaddafi in 2011. Supply from what is now OPEC’s smallest producer influences the price of Brent, Europe’s benchmark crude, relative to West Texas Intermediate, its U.S. equivalent. The world’s most-traded oil spread widened to as much as $23 a barrel last year, from about $3 at the end of 2010.

The North African nation was producing at a daily rate of about 250,000 barrels yesterday, compared with 1.6 million barrels under Qaddafi.

“The federalists will probably keep the biggest ports of Es Sider and Ras Lanuf offline and will re-occupy the ports of Hariga and Zueitina,” Eurasia Group, a political risk consulting firm, said in an e-mailed note today.

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