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Friday, May 20, 2022

Libya’s Oil Output Rises to 1 Million bpd

On Thursday, Libya’s Minister of Oil, Mohamed Aoun announced that the country’s daily output is rising gradually after a blockade of its western fields ended, and ports in the east re-opened.

Aoun told Bloomberg that the Libyan output is currently at 963,000 barrels per day (bpd).

Production has fluctuated significantly since mid-December, when militias forced western fields, including Libya’s biggest, El-Sharara, to close down as part of a dispute over pay and politics. The sector was further hit when a major pipeline was shut for repairs early this month, and then again when bad weather caused at least four eastern ports to close.

Libya’s daily output, which averaged 1.2 million barrels a day last year, fell to as low as 700,000. El-Sharara was pumping 200,000 bpd as of Wednesday, roughly 60% of its capacity.

Libya’s daily production fell below 1 million bpd as a result of the stoppages, with authorities forced to suspend crude exports from the country’s western Zawiya and Mellitah ports. Daily oil exports in the first week of 2022 were 45% below the December average, data compiled by Bloomberg show.

Exports may still be hindered, at least in the next few days, as ports in the west remain closed, also because of rough weather.

Oil traders are watching Libya closely. The country sits on Africa’s largest reserves, and any disruptions would further tighten the market at a time when demand’s recovering from the depth of the COVID-19 pandemic. West Texas Intermediate crude is up 10% this year to almost $83 a barrel, extending last year’s 55% surge.

The volatility in Libya’s production comes as political tensions rise. A Presidential election was meant to be held on 24 December, but was delayed indefinitely. Disputes over the eligibility of candidates threaten to sow fresh turmoil in a country that’s been in conflict or civil war for much of the past decade.

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