EU paper says an oil embargo on Libya would have limited economic impact
Oil embargo among EU options to press for peace in Libya
BRUSSELS, January 19, 2015
An oil embargo is one tactic the European Union (EU) could use to press for a solution to the crisis in Libya, according to a discussion paper drawn up by the EU's diplomatic service.
The embargo was one of a range of options in the confidential paper, seen by Reuters, which will serve as a basis for talks among EU foreign ministers in Brussels.
Another "drastic measure", which should only be considered as a last resort if Libya descended into full-scale civil war, could be the freezing of the Libyan central bank's overseas assets, the paper said.
The possibility of an oil embargo as a means of applying pressure for a resolution of the Libyan crisis has been discussed by the EU's 28 member states, the paper said.
However, it made clear that pushing for the United Nations to adopt an oil embargo would be risky.
"This ... would put pressure on parties to cease hostilities and participate in the dialogue process. However, this option should be considered with the greatest caution as it would take a heavy toll on the Libyan economy and society, and may trigger unforeseen reactions," the options paper said.
"Should the option of an oil embargo be considered, a starting point would be to request the UN to look into this possibility," it said.
One EU diplomat said that, in preliminary discussions, it had become clear that an oil embargo was "basically a no-go" because it would hurt Libya's population as a whole.
IMPACT
The paper said that an oil embargo on Libya would have limited economic impact on European importers of Libyan oil because sharp swings in Libyan oil production had already forced buyers to look for alternatives.
The paper estimated Libyan oil production at 200,000 barrels a day (bpd) now, down from 900,000 bpd in November.
However, the paper said an oil embargo would have drawbacks and pointed out that the UN already bans illegal exports of oil from Libya.
The EU is seeking ways to support UN special envoy Bernardino Leon's efforts to broker a solution to Libya's political crisis. Libyan factions agreed to continue UN-backed negotiations in Geneva next week, the UN said.
Nearly four years after a Nato-backed revolt ousted Muammar Gaddafi, Libya is in turmoil with two rival governments and two parliaments backed by allied armed factions.
The EU paper said the "worst-case scenarios of civil war and the disintegration of Libya itself" seemed to be real possibilities and must be avoided.
One option the EU could consider, the paper said, was to work with key partners to draw up a shortlist of Libyans who could face sanctions for undermining peace efforts.
The paper also detailed a range of economic measures the EU could consider taking to stop Libya's resources being exploited for military or political purposes, such as supervising the financial assets of the Libyan central bank, or in the worst case scenario freezing the bank's overseas assets.
The paper raised the possibility of NATO again taking on the task it carried out in 2011 of enforcing a UN arms embargo on Libya.--Reuters
