An economic report featured in the Cypriot newspaper, “Hellenic Shipping News Worldwide,” has highlighted the significance of Libyan oil exports. The report warns of the potential resurgence of oil-related protests, not just in the Sharara field, but also at the Zawiya refinery, if the demands of the protesters are not met.
Surprisingly, there is a somewhat positive immediate impact on the Mediterranean “Aframax” oil tanker market, which typically accommodates cargo loads ranging between 80,000 and 120,000 tons. The disruption has affected only 4-5 immediate shipments, pushing about 10 of them to the following week.
Gibson notes that this situation has bolstered the local “Aframax” rates, instilling a stronger sense of resilience in the region. This is attributed to the continued operation of the Zawiya port facilities, despite a drop in crude oil shipments. A prolonged disruption could negatively impact the market, once the accumulated shipments are cleared.
Notably, there are challenges faced by the National Oil Corporation (NOC) in Tripoli, in achieving the targeted sustainable production growth towards the intended goal. Currently, it remains difficult for the corporation to reach a production level of 2 million barrels per day.
The recent developments in the Sharara oil field serve as a critical indicator of the persistent risk of Libyan oil supply interruptions. This could have severe future implications for the Mediterranean crude oil tanker market, especially if future disruptions are significant.
The ambitious oil production goals require a stable investment environment, for global oil companies to operate and provide additional capacity. While the current disturbances are not expected to reach the levels seen in 2022, they clearly demonstrate the ongoing difficulties faced by the Libyan oil industry in enhancing its production.
The report concludes by highlighting these disturbances, underscoring the persistent challenges encountered by the Libyan oil industry in increasing its production. The situation remains a matter of close observation for stakeholders in the Mediterranean oil market and beyond.