US sanctions cripple Libyan oil exports

NEW YORK: US sanctions against Libya are crippling the country's oil exports as market participants fear being accused of financing the regime of leader Moamer Kadhafi, a person familiar with the situation said Tuesday.

"I talk to a lot of guys at some of the banks and a couple of oil companies and they are shut down in terms of Libya, essentially because they can't accept payments," the person told AFP.

"The Treasury Department have told them to shut down," he said. "It can ultimately end up halting all the exports, we are on track for that, because everybody is on board with these sanctions."

The International Energy Agency, the developed countries' watchdog, said Friday that Libya is now exporting between 500,000 and 600,000 barrels of crude oil a day, compared with a daily average of 1.3 million in 2010.

On February 25, US President Barack Obama imposed sanctions on Kadhafi, four members of his family, and Libyan government agencies over a brutal crackdown on anti-regime protesters.

Days later, the US Treasury announced it had frozen at least $32 billion in Libyan assets, calling it the largest blocking under any sanctions program in the country's history.

The sanctions targets include US companies' subsidiaries controlled by Libyan companies, such as US oil groups operating in the country under the control of the Libyan state oil company. (AFP)