Libya’s Oil Recovery Drives Global Output

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OPEC’s oil output has risen for the last six months, driven largely by Libya’s brisk recovery in oil production according to a survey from Reuters.

The survey added that the 13-member organisation pumped 25.59 million barrels per day (bpd) in December. This is up 280,000 bpd from November, and a further increase from a three-decade low reached in June.

Libya, a nation politically split between east and west, has resumed production since the Commander-in-Chief of the Libyan National Army (LNA) Field Marshal Khalifa Haftar lifted the eight-month blockade on oil exports.

The survey found Libya’s output increased 150,000 bpd in December, resulting in a total output of 1.25 million bpd, a faster rebound than some analysts and OPEC officials expected.

OPEC’s output is set to rise further in January after OPEC+, which groups OPEC members and other producers like Russia, agreed to ease output cuts.

Under an output agreement reached on Tuesday, most OPEC+ members will keep production steady, while Saudi Arabia has offered to make a substantial voluntary cut. Libya is exempt from the cuts due to the current situation in the country.

“The additional production cut by Saudi Arabia will probably prevent the oil market from becoming oversupplied in the first quarter, which risked happening otherwise,” said Carsten Fritsch, an analyst at Commerzbank.

OPEC producers bound by the supply deal also boosted output in December, the survey found. This meant their compliance with agreed output cuts slipped to 99% from 102% in November and hit their lowest level since August.