Money is the artery of war.
- Peter the Great (attributed)
For a market missing some high-quality Libyan oil and wondering what happens if there’s going to be a long civil war there, here is a highly interesting development.
We think Libya’s rebels now have to a way to access oil cash, and therefore it could also be a way for Libyan oil to come back to the market even if Gaddafi stays on.
The Gaddafi-controlled National Oil Corporation and central bank come under UN sanctions now, making it harder for the Colonel to recycle oil receipts into cash for his armies — but also finally closing remaining outside access to production from these entities.
But what if other entities appeared outside his control?
Notably — here is an odd line in the way the US Treasury is now implementing the UN sanctions. From a statement last night, our emphasis:
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today identified 14 companies owned by Libya’s National Oil Corporation, as subject to sanctions pursuant to Executive Order (E.O.) 13566…
Treasury will continue monitoring the National Oil Corporation’s operations in Libya. Should National Oil Corporation subsidiaries or facilities come under different ownership and control, Treasury may consider authorizing dealings with such entities.
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