Libyan central bank governor expects oil output deal soon

A Libyan central banker caught in a political crossfire believes a deal to restart the nation’s crucial oil production is on the horizon.

Sadiq Al-Kabir, whose attempt to oust the western government’s central bank sparked an oil shutdown, expressed optimism on Tuesday about a potential agreement between rival factions.

A resolution to Libya’s political feud could unleash over half a million barrels of daily oil supply onto global markets, potentially driving prices lower. This development comes as OPEC members prepare to increase their own production.

Although Al-Kabir and other bank staff fled Libya after threats from armed groups, he said in an interview from Istanbul, Turkey he remains hopeful about being part of any solution and is ready to return.

“If they sign today, I’ll be back tomorrow,” noted Al-Kabir.

Before the oil halt order on August 26, Libya was producing around 1 million barrels of oil per day, with the vast majority coming from the east. The shutdown has reduced daily output to approximately 450,000 barrels. The country has Africa’s biggest proven oil reserves, but output has often been held hostage to political rivalries ever since ousting former president Moammar Al Qaddafi in 2011.

The UN reported late Monday that consultations with stakeholders in the capital, Tripoli, led to “significant understandings” and a plan to finalise an agreement the following day. However, It didn’t provide details, nor say whether a deal would involve Al-Kabir.

The UN-helmed talks continued on Tuesday, two people familiar with the matter told Bloomberg. Though there’s been progress, the discussions remain fragile and challenges still exist, the sources added.

Attribution: Bloomberg