Source: Golden Ten Data
If civil unrest in the OPEC member continues, it may lead to further supply disruptions.
Libya closed its largest oil field on Monday and warned of further disruptions. Demonstrations against Libyan Prime Minister Dbeibah threaten to affect the OPEC member’s energy industry, with Libyan oil production likely to fall by more than 500,000 barrels per day.
The Sharara oil field, which produces 500,000 barrels a day in the western part of the country, was shut down after protesters gathered there to demand Dbeibah’s resignation, according to people familiar with the matter. The nearby El Feel field, which produces 65,000 barrels a day, was also suspended for the same reason.
Libya’s output could be cut by 535,000 barrels a day as a result, and it is set to fall further, one of the people said. As of Sunday, the country was producing as much as 1.1 million barrels per day of crude oil.
Libya’s National Oil Company (NOC) officially suspended loadings from the eastern port of Zueitina on Monday, calling it “the beginning of a wave of painful closures”. The NOC also declared a force majeure event during loading at the port of Mellitah in western Libya. In addition, Libya’s oil port Brega was closed on Monday, and protesters also threatened to suspend exports from two oil ports, Es Sider and Ras Lanuf. The NOC said in a statement:
We have been emphasizing the importance of neutralizing the oil sector and avoiding involvement in national political conflicts.
It is the latest in a series of disruptions to Libya’s oil industry amid a worsening political crisis. Part of the reason oil prices climbed earlier on Monday was the outage.
It’s a delicate time for Libya and the global commodity markets, which depend on oil exports. Oil supplies have tightened since the Russian-Ukrainian conflict, with Brent crude soaring above $138 a barrel at one point.
Libya is producing just over 1 million barrels a day of crude this year, but still down from nearly 1.2 million barrels a day in 2021, according to data compiled by Bloomberg. The drop cost the country millions of dollars in lost revenue.
The North African country has been in frequent turmoil since the fall of Moammar Al Qaddafi in 2011. Dbeibah rejected calls from some lawmakers to resign after a Libyan parliament speaker announced former interior minister Fathi Bashagha as prime minister in February.
Earlier this month, representatives of Khalifa Haftar, commander of Libya’s eastern armed forces, the National Army, withdrew from a state military council aimed at securing a ceasefire. They also said Haftar should block oil exports.
Libya was due to hold presidential elections in December last year. But with just a few days left until the election date, the election was postponed, breaking the peace.
Editor/Corrine
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