LONDON--Libyan rebels have reached a deal to reopen two
terminals which handle nearly half the country's normal oil
exports, pushing crude prices to their lowest level in three weeks
Wednesday.
The agreement, which was confirmed by the government, provides
some relief for markets rattled by fears of disruptions in
Iraq.
The two Eastern oil ports, called Es Sider and Ras Lanuf, have
been occupied by a group led by Ibrahim al-Jathran, which is
seeking greater regional autonomy.
In a televised news conference with Mr. al-Jathran, Libya's
acting Prime Minister Abdullah al-Thani confirmed the agreement.
"We have received today Ras Lanuf and Es Sider oil ports," Mr.
Thinni said at Ras Lanuf terminal in eastern Libya. "This is the
end of the oil crisis."
Earlier, Osama Sultan, an aide to Mr. al-Jathran told The Wall
Street Journal that "an agreement was signed yesterday" to resume
exports from the facilities. Libya's justice minister Salah
El-Marghani, who was part of initial negotiations to seek
resumption of operations at the ports, confirmed the rebels had
agreed to reopen them.
But an oil official said the port operators hadn't received any
official orders to restart operations at the ports, which normally
load 560,000 barrels daily, nearly half of Libya's export capacity
of 1.3 million barrels a day.
The prospect of a resumption of exports from the two terminals
pushed Brent below $112 a barrel for the first time since June 12,
and the contract has now shed more than $4 since reaching a
nine-month high of $115.71 a barrel on June 19. At 1419 GMT, the
Brent traded was down 0.72%, at $111.49 a barrel.
Oil prices have been buoyed in recent weeks after Sunni
militants took over large parts of Western Iraq. The unrest sparked
concerns that the conflict could somehow spill over to oil fields
in the south of the country.
Any increase in Libyan oil exports will come as a welcomed
relief after strikes and armed occupations at fields and ports
since the fall of leader Moammar Gadhafi cut production to around a
fifth of its normal output of about 1.5 million barrels a day.
In April, the rebels allowed the resumption of shipments from
two smaller oil ports they controlled in Eastern Libya.
The group led by Mr. al-Jathran has now agreed to let operations
resume because conditions set in April--such as the payment of
arrears to oil guards had been met, Mr. El-Marghani said.
In addition, the rebels have decided to release oil flows in
support of a new parliament which was elected last week, he said.
Though the results aren't known, the lawmakers will replace an
assembly dominated by Islamists, which Mr. al-Jathran's group had
opposed.
However, some previous pledges to let exports restart haven't
been respected or were followed by new interruptions.
Write to Benoît Faucon at benoit.faucon@wsj.com or Ben Winkley
at ben.winkley@wsj.com
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