U.S. Treasury OKs Libyan rebel oil sales

Libyan rebels gather on the frontline as smoke from a burning oil facility darkens the sky on March 11, 2011 in Ras Lanuf, Libya.

Kai Ryssdal: Say this for the Libyan rebels: They may be outgunned and overpowered without allied airstrikes to help them out, but they're sure got their economic house in order. They formed a central bank of their own last week, complete with authority over monetary policy. It's officially the Central Bank of Benghazi.

And now, having regained control over some key oil facilities, they say they've signed an export contract for that crude. From London, Marketplace's Stephen Beard reports.


Stephen Beard: Buoyed up by military success, the rebels are expanding into the oil business. They say they've done a deal to export more than 100,000 barrels of crude a day to the Gulf state of Qatar. Qatar won't confirm the story, but Julian Lee of the Centre for Global Energy Studies says the rebels' claim is feasible.

Julian Lee: They are now apparently in control of most of Libya's export terminals. Some of them may have been damaged in the fighting, but certainly I think from a physical point of view, it's probably possible for them to start exporting oil.

Some oil traders said they wouldn't touch this rebel crude. They fear it might break the international embargo. But the U.S. Treasury said American sanctions do not apply. And George Joffe of Cambridge University says U.N. and EU sanctions don't either.

George Joffe: The sanctions are against the Gaddafi regime, and it's quite clear from the whole tenor of the way in which the sanctions resolutions have operated, that their aim was to be targeted at that regime.

If an oil deal with Qatar does go ahead, it will be good for the rebels. But Joffe says it won't make much difference to the global price of oil. It will be a long time before Libyan production is back to normal.

Joffe: Foreign personnel have got to return. Foreign companies have got to take up their concessions again.

And, he says, it will be many months before Libya is exporting the usual 1.6 million barrels a day.

In London, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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