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Americas: US majors, international trading houses say complying with sanctions on Libya

https://www.chemnet.com   Mar 09,2011 Platts
Major US oil companies and international trading houses that have traded with Libya are falling in line with newly imposed sanctions against conducting commerce with that country, a Platts survey showed Monday.

ConocoPhillips, ExxonMobil, Hess, LyondellBasell, Marathon Oil, Occidental, Valero and traders Glencore, JP Morgan, Koch, Trafigura, and Vitol have said they are complying with the US government and United Nations sanctions against the government of Libya.

Sanctions have been put in place amid the violent crackdown by Moammar Qadhafi's regime against anti-government protesters. Three weeks of fighting between the two sides have raised fears of a civil war, sending global oil prices higher.

"I think the market has taken a defensive outlook on [trading with Libya]," said one US trader.

A source in the US Department of Treasury last week said the US sanctions on Libya apply to all US-based entities and their subsidiaries worldwide. The source said the sanctions also applied to oil or other commodities bought from or sold to Libya where delivery has not yet been made. A special permit is required from the Treasury Department to make delivery.

JP Morgan has stored Libyan straight run fuel oil in Sweden and because of the sanctions its lawyers are seeking permission from the UN and US to sell the Libyan fuel oil in storage, sources said.

Last week, sources said trading houses began to pull back from their relationships with Libya due to legal and financial concerns over any dealings with Libyan banks and government entities as a result of sanctions.

In addition, confusion about the operational status of Libya's ports frustrated traders, while Libyan refineries were also reported to be shut due to feedstock shortages and the inability of workers to go to the plants because of the unrest.

The restrictions are not solely focused on US companies, with a jet fuel source at an EU-based major saying last week it could be prevented from buying jet fuel from Libya.

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