Easing of U.S. Oil Sanctions Is Expected

President Reagan is likely to act this week on a proposal to lift some sanctions against American oil companies doing business in Libya to keep Moammar Kadafi from “getting a windfall,” an Administration official said today.

The official, who asked to remain anonymous, said the easing of prohibitions on the U.S. companies would be designed to prevent them from losing assets in Kadafi’s North African nation. A delicate agreement between the Libyan leader and the companies expires June 30, and he then might seize their assets.

Any Reagan action would be limited and would not apply to the comprehensive economic sanctions in trade and other areas that have been in effect since 1986, the Administration official stressed. Reagan recently signed an executive order renewing the restrictions for a year.

“This is to prevent Kadafi from getting a windfall,” the official said of the oil proposal. “It’s not that we’re getting soft on Kadafi.”