Over half of Libya's oil production, or around 700,000 barrels per day (bpd), was offline on Thursday, as a standoff between rival political factions over the central bank and oil revenue puts at risk breaking a four-year period of relative peace.

The crisis over control of the Central Bank of Libya threatens a new bout of instability in a major oil producer, split between eastern and western factions that have drawn backing from Türkiye and Russia.

Output at oilfields controlled by Waha Oil Company, a subsidiary of the National Oil Corporation, has dropped to 150,000 barrels per day (bpd) from 280,000 bpd, engineers told Reuters on Thursday.

Production has also been halted or cut at the Sharara, Sarir, Abu Attifel, Amal and Nafoora fields, engineers have said.

That has taken roughly 700,000 bpd of oil output offline, according to Reuters calculations. Libya pumped about 1.18 million bpd in July.

Consulting firm Rapidan Energy Group has estimated production losses could reach between 900,000 and 1 million bpd and last for several weeks.

Eastern factions have vowed to keep oil production shut off until the internationally recognized Presidency Council and Government of National Unity in Tripoli, in the west, return veteran central bank Governor Sadiq al-Kabir to his post.

The Presidency Council, headed by Mohammed al-Menfi, said on Aug. 18 that it was dismissing Kabir, a move rejected by the eastern-based House of Representatives parliament and eastern commander Khalifa Haftar's force called the Libyan National Army.

The North African member of the Organization of the Petroleum Exporting Countries (OPEC) has had little stability since the 2011 NATO-backed ouster of longtime leader Moammar Gadhafi. The east-west split of rival factions dates back to 2014.

Oil blockades have been used frequently as a political tactic in the chaos following the end of Gadhafi's 42-year rule.

However, while smaller localized shutdowns have sometimes been resolved within days, larger blockades tied to major political or military struggles have sometimes lasted months.

The longest major blockade, when Haftar stopped nearly all production in 2020 for eight months, was only resolved as part of a wider agreement when his assault on Tripoli collapsed.