Trading house Glencore has secured a deal to buy as much as half of the oil Libya is currently exporting, market sources said, as it looks to boost trading to help offset flagging profits from mining.
For war-torn, cash-strapped Libya it offers steady sales to international buyers and shifts to Glencore the risks associated with loading oil and chartering vessels at ports where operations have become more unpredictable due to the conflict in the north African nation.
Under the arrangement with Libya’s state-run National Oil Corp, which began in September, Glencore loads and finds buyers for all the Sarir and Messla crude oil exported from the Marsa el-Hariga port near the country’s eastern border with Egypt.
While Libyan oil exports peaked at 1.6 million barrels per day, battles between rival factions seeking to control the country, as well as strikes and blockades by local tribes, have kept production under 0.5 million bpd for most of the past year.
Hariga, with exports of up to 140,000 bpd, has become Libya’s largest exporting terminal, as the two biggest – Es Sider and Ras Lanuf – remain closed.
The NOC was not immediately available for comment, and Glencore also declined to comment.
Some oil companies and refineries had grown reluctant to send vessels to load Libyan oil.