United States Concerned with Oil Shutdown — Remains Focused on Libyan Mechanism to Resolve Disputes Rather than Holding Services Hostage

The United States is deeply concerned by the continued oil shutdown, which is depriving Libyans of substantial revenue, contributing to increasing prices, and could lead to electricity blackouts, water supply problems, and fuel shortages. The damage the shutdown is causing to oil infrastructure will cost Libya additional millions, risks an environmental disaster, and could impact the country’s ability to utilize this infrastructure in the future to reach its full production potential. Responsible Libyan leaders must recognize that the shutdown harms Libyans throughout the country and has repercussions across the global economy, and should end it immediately. The United States reminds Libyan leaders of the multiple UNSCRs that protect the National Oil Corporation and reaffirms our commitment to work with Libyan leaders on a mechanism that will give the Libyan people confidence that the country’s revenues are being distributed for the benefit of the Libyan people.

Prior to the shutdown, the United States had recommended an incremental transfer of revenue subject to monitoring and oversight by a Libyan-led financial mechanism; however, Libyan leaders independently decided to make more substantial transfers. The United States considers the shutdown of Libyan oil production to be a hasty response that hurts the Libyan people and undermines international confidence in Libya as a responsible actor in the global economy.

The United States advised and continues to advise the creation of a temporary Libyan financial mechanism with broad support to address how Libya’s revenues should be spent in the absence of an agreed national budget. Such a mechanism could be used by Libyan authorities to give the Libyan people confidence regarding how oil revenues from the National Oil Corporation would be used and to prevent the diversion of funds for partisan political purposes that could undermine Libya’s peace and security. We recommend the mechanism be designed to allow Libyans to ensure the payment of critical expenditures for the people with the highest degree of transparency. In order to build trust, all parties must know when and to whom funds are transferred to finance the agreed expenditures. We underscore that Libya’s wealth should serve Libyans throughout the country — no outsider should decide the fate of Libyan resources and any mechanism must only allow an avenue for Libyans to find agreement among themselves and avoid unnecessary economic disruptions that only serve to hurt all Libyans.