Commodities trading company Glencore has reportedly struck a deal for purchasing significant quantities of Libyan oil from what appears to be the Tripoli-based NOC, despite the recent creation of its Eastern rival. Consequences of the deal remain uncertain due to political and administrative ambiguities.The shipments to be sold to Glencore are apparently unscheduled surplus amounts for domestic consumption, which accumulated after the Ras Lanuf refinery shut down and a previous attempt at a crude-for-fuel swap failed due to the NOC’s legal prohibitions.Although the NOC in Tripoli maintains that it is neutral and united, it is unknown whether arrangements between the central bank in Tripoli and the HoR government will hold if the newly established NOC and central bank headquarters in Benghazi start operating independently. The Tripoli-based NOC still makes no mention of the Glencore deal on it's website, raising questions of if the deal was in fact made with the new NOC in the east.However, even if this is the case, the possibility remains that the Tripoli-based NOC dares not challenge the deal in order to maintain a semblance of neutrality while the political vacuum persists. For example, it is possible that NOCs and central banks came to an agreement whereby the Western NOC endorsed the sale and revenue collection by the Eastern NOC in order to maintain a unified fiscal process and provide foreign currency to the East without splitting the country.Of course, such a compromise could cause an uproar in Tripoli, but with the surplus in the east, there is little it can do. A dramatic reaction would increase existing partition dynamics and undermine the status quo. A Government of National Accord could potentially diffuse the situation more quickly, but could equally inflame it. Thus, it is possible that Tripoli will cooperate with the NOC and central bank as they work towards harmonisation with their counterparts in the east. Whether Tubruq will do the same remains unclear.
Glencore deal raises questions amid rival NOCs