March 1, 2011 / 11:07 PM / 7 years ago

UPDATE 3-Libya oil cargo stuck off US coast due sanctions-trade

* Cargo of Libyan crude in USG arrived before sanctions

* Libya accounts for small portion of U.S. oil imports

* Treasury Dept license may be possible for transaction (Adds comments from U.S. Dept of Treasury)

By Janet McGurty and Jonathan Saul

NEW YORK/LONDON, March 1 (Reuters) - A cargo of Libyan crude is sitting off the coast of Texas and Louisiana and unable to discharge due to concerns about potential violations of recently imposed U.S. sanctions against Libya, trade sources said on Tuesday.

Market sources said the ship was off the U.S. Gulf Coast’s refinery row, on the border of Port Arthur, Texas and Lake Charles, Louisiana.

Libya accounts for a small percentage of U.S. imports. In 2010, the United States imported about 43,000 barrels per day (bpd) of crude from the OPEC nation, out of average imports of nearly 9.2 million bpd for the year.

A U.S. Treasury Department spokeswoman declined to comment on the specific case reported by Reuters involving the Libyan crude cargo.

However, she said in cases where Libyan goods were in transit on or before Friday, when Obama signed the executive order imposing sanctions on Gaddafi’s regime, the purchasing party can apply to the Treasury’s Office of Foreign Assets Control (OFAC) for a license granting permission to complete the transaction.

OFAC would typically examine the transaction to ensure that no sanctioned individual or entity would benefit from the transaction.

“OFAC would look more favorably on a request for a US entity to receive payment for a transaction that was already in process versus the other way around,” the spokeswoman said, noting that the policy was the same across all of Treasury’s sanctions programs.

For details U.S. sanctions against Libya: [ID:nN25146892]

OFAC enforces all of Treasury’s sanctions programs including the U.S. trade embargo with Cuba.

One trade source said the cargo was owned by a large trading house and was en route before sanctions were imposed.

The United States imposed sanctions against the Libyan government on Friday, saying the legitimacy of longtime Libyan leader Muammar Gaddafi had been “reduced to zero.”

The United States sent warships toward Libya on Tuesday as Washington warned that the oil-producing North African country could descend into chaos unless embattled Gaddafi relinquished power. [ID:nN01143916] (Additional reporting by David Lawder in Washington; Editing by Alden Bentley)

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