Major oil companies and banks have stopped trading crude oil with Libya, posing a major risk to the country’s oil industry and fueling the rise in oil prices, the Wall Street Journal reports.
Sources told the Journal that banking giant Morgan Stanley stopped buying Libyan oil for clients because of sanctions, energy company ConocoPhillips isn’t exporting oil it usually produces in Libya, BP PLC isn’t “currently doing any new trading deals” in the country and Exxon was complying with sanctions.
Libya is the world’s 12th largest oil exporter. Unrest there has caused its oil production to drop by about two-thirds in recent weeks, the Journal reported—a drop that costs Libya more than $100 million in revenue each day. Sanctions could prevent some buyers from exporting the remaining oil, the Journal reported.
Oil prices have remained high in recent weeks. Oil for April delivery declined Tuesday morning for the first time in three days to $103.33 a barrel-- though it hit $106.95 yesterday, the highest since September 2008. Meanwhile, the price of gas went up again overnight on Monday, raising the national price of a gallon of regular self-serve to $3.52 a gallon Tuesday morning, the highest since September 2008.