Friday, March 4, 2011

FT: Libya's Oil Dollars Still Flow to Gaddafi

Financial Times, whose parent is partially owned by the Libyan Investment Authority, reports that despite the UN, EU, and US sanctions hundreds of millions of dollars from oil export continue to flow to Gaddafi's Libya.

From FT (3/4/2011) [emphasis is mine]:

Muammer Gaddafi’s regime is still benefiting from hundreds of millions of dollars in oil export revenues, even as western powers impose financial sanctions aimed at forcing Libya’s leader from power.

Payments for crude oil exports are finding their way back to Libya’s central bank and, potentially, into Col Gaddafi’s direct control, according to a senior western oil official and traders contacted by the Financial Times.

Oil officials and shipbrokers said that Libya exported about 570,000 barrels a day in the last week of February, when the unrest started, and shipped about 400,000 b/d this week. At current prices, the oil shipped over the two-week period is worth $770m.

.... UN and European sanctions do not target the Libyan central bank and US sanctions do not hit Libyan-owned groups incorporated outside the country.

US Treasury officials say that institutions of American origin cannot make payments to groups subject to Washington’s sanctions, such as the Libyan central bank, but can make deposits into a blocked interest-bearing account to be refunded to the Libyan people at a later date.

.... Col Gaddafi still controls Libya’s largest oil terminal, Es Sider, in the centre of the country. Argus, the energy reporting service, estimated that Libyan crude exports had fallen to about 225,000 b/d on Friday. If Libya is able to sustain exports at that level, which some industry executives and shipbrokers doubt, the country could earn nearly $200m a week.

Sanctions are there so that they know how to get around them. Much like TBTF Wall Street banks welcomed the Dodd-Frank bill on financial regulations so that they can figure out how to get around them.


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