Libya's state oil company warns of force majeure as armed group shuts 3 oilfields

An armed group guarding oil facilities in Libya locked valves on a crude pipeline, halting production at several oilfields. The National Oil Corporation warned it could declare force majeure if the situation persists.

According to Reuters, the NOC said Tuesday (local time) that members of the Petroleum Facilities Guard locked valves on a crude loading pipeline connecting Hamada and Zawiya, shutting down production at the Hamada, Tahara and NC5 oilfields.

The NOC said it could declare force majeure if the valves remain closed or if similar forced shutdowns occur at other oilfields.

A force majeure declaration is a formal notice to counterparties that relieves a party of contractual obligations when circumstances beyond its control — such as war or natural disaster — make fulfillment impossible.

The PFG, currently under the Ministry of National Defense, is demanding that it be transferred — administratively and financially — under the NOC, and launched the action to press that demand.

The group has called on the prime minister's office and the NOC to swiftly complete the administrative and fiscal procedures required for the transfer and to provide a clear implementation timeline.

The PFG also said it would impose partial production cuts at several oilfields — including Wafa, Al Khamsa and El Feel — for one week starting that day, and warned of a full shutdown if its demands are not met.

Oil production is Libya's primary source of revenue, accounting for roughly 90 percent of the country's economy.

Production has been disrupted multiple times due to political instability and other factors since Muammar Gaddafi was ousted in 2011.

"Closing oilfields and halting production at such a critical time, when crude prices are rising globally, is a devastating blow to the national economy," the NOC said in a statement.