• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 3 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 53 mins China's Blueprint For Global Power
  • 5 hours IMO 2020:
  • 7 hours World Stocks Drop And Futures Tread Water After China Reports Worst GDP Growth In 30 Years
  • 15 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 12 hours Why did Aramco Delay IPO again ? It's Not Always What It Seems.
  • 15 hours ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 28 mins Brexit agreement
  • 8 hours Deepwater GOM Project Claims Industry First
  • 15 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 17 hours Why don't the other GOP candidates get mention?
  • 17 hours Bloomberg: shale slowing. Third wave of shale coming.
Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Premium Content

Did Libya's Oil Bubble Burst Already?

Libyan crude oil production has witnessed a notable uptick since major combat operations ended last year. In mid-2011, at the height of the international conflict, it looked as if the loss of Libyan crude oil could unravel any hopes of a global economic recovery. Crude oil prices have in general increased during the first four months of 2012, though some optimism was expressed because of Libya's return. With Tripoli headed for its first free election in 40 years, however, nothing is certain regarding the former OPEC giant.

OPEC said in its monthly report for March that crude oil production was inching closer to pre-war levels of around 1.6 million barrels per day. Italian energy company Eni said that not only was oil production about 20 percent shy of the 1.6 million bpd mark but offshore exploration had resumed for the first time since Moammar Gadhafi's regime collapsed last year.

Most of Libyan oil production was shut down because of last year's conflict. From January to February, production jumped by a whopping 25 percent. But things are rarely as good as they seem in the Middle East. The energy sector in Iraq, a few elections into a war-won democracy, is more or less handicapped by internal political rivalries and Libya appears to be no different.

It's emerging democracies, not dictatorships, that are often the most violent of states as formerly repressed actors jockey for power. Leftovers from the civil war in Libya last year are in part to blame for the military coup reported in Mali in mid-March. At home, tribal feuds and separatist ambitions could make the Iraq analogies even more relevant. More than a dozen people were killed in clashes this week, roughly one year after NATO operations against Gadhafi's regime began.

Most analysts and world leaders had expressed surprise at the pace at which Libya's oil production was rebounding.  Analysts at this year's energy conference in Houston, however, warned not to "expect much" from Libya. The transitional government, meanwhile, has formed a committee looking into allegations of corruption in the country's oil industry before Gadhafi's regime collapsed and in June, the country is expected to hold its first round of elections in a contest pitting Islamists against secular parties. But if regional models in Egypt prove anything, it's that democracies in countries accustomed to dictatorships rarely lead to anything resembling a national consensus right away. Opposition is unifying, but that consensus erodes once the target of dissent is removed.

Tripoli said it might take a closer look at its existing agreements with international oil companies, which presumably includes Italy's Eni. OPEC in its March report warned that if interim leaders in post-revolutionary countries can't maintain political order, any chance of economic recovery is in danger. With the next monthly report due out in a few short weeks, don't be surprised if OPEC is less optimistic about the prospects for Libyan oil.

By. Daniel J. Graeber of Oilprice.com




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play