11 August 2026
Executive Summary
Libya’s National Oil Corporation has warned that it could declare force majeure and completely halt operations at the Zawiya refinery if repeated drone attacks on energy infrastructure continue.
Three attacks targeted oil assets around Zawiya over Sunday and Monday.
One strike caused a fuel tank containing approximately 4.5 million litres of gasoline to catch fire and collapse. Another drone fell close to an oil-blending facility and pipeline network; no casualties or material damage were reported from that latest incident. Responsibility for the attacks has not been established publicly.
Zawiya has capacity of approximately 120,000 barrels per day, is Libya’s largest currently operating refinery and is connected with the major Sharara oilfield.
UK Impact
For UK businesses, this is not primarily a story about Libyan petrol.
It is a useful example of how rapidly a physical-security incident can become a contractual event.
Potential consequences include:
- Force-majeure declarations.
- Cancelled or delayed deliveries.
- Replacement purchasing at higher prices.
- Increased freight costs.
- Political-violence insurance claims.
- Supplier liquidity pressure.
- Disputes over whether alternative supply should have been obtained.
- Questions about whether the event genuinely prevents contractual performance.
Businesses purchasing commodities, chemicals, energy or other strategically sourced materials should understand exactly what their contracts allow if production is interrupted.
Global Impact
Modern supply chains increasingly operate through politically exposed infrastructure.
The critical distinction is that an attack does not need to destroy the entire facility.
Repeated attacks may make an operator decide that continuing production is no longer safe.
That decision can interrupt supply even where the plant remains physically capable of operating.
This creates an important difference between:
Physical damage
and
Operational unavailability.
Insurance and contractual responses may differ substantially depending upon which has occurred.
Our View
Businesses frequently include force-majeure clauses in contracts but rarely test how those clauses would actually operate.
Companies should:
- Review precisely which events qualify as force majeure.
- Confirm whether terrorism, drone attacks, war and civil unrest are included.
- Establish whether suppliers must seek alternative production.
- Check notification deadlines.
- Determine whether price increases alone qualify.
- Review termination rights after prolonged disruption.
- Confirm who bears replacement-purchasing costs.
- Examine political-violence and business-interruption cover.
- Check whether insurance requires physical damage before responding.
- Maintain evidence of mitigation steps taken after disruption.
The most important question is:
Does force majeure excuse performance—or merely delay it?
The answer depends upon the contract.
Finding out after the refinery closes is too late.
Risk Indicator: HIGH
Disclaimer
The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.