After six months of port blockades and no exports, Libya’s National Oil Corporation (NOC) said on Friday that it lifted force majeure on all oil exports from Libya, potentially giving OPEC+ a headache in the coming months as the group continues to withhold supply from the market.
The first vessel to load crude oil from Libya is the Kriti Bastion from Es Sider oil port, NOC said today, but noted that the oil production increase in the country “will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17.”
NOC placed the oil terminals at Hariga, Brega, Zueitina, Es Sider, and Ras Lanuf under force majeure at the beginning of this year, after forces affiliated with the Libyan National Army (LNA) of eastern Libyan strongman General Khalifa Haftar occupied Libya’s oil export terminals and oilfields.
The blockade at the ports lasted for more than six months, but parties were negotiating – and apparently reached – an agreement, for the re-opening of the oil terminals and the restart of oil production, which had plummeted to just 100,000 barrels per day (bpd) compared to 1.2 million bpd before the blockade.
“We are very glad finally to be able to take this important step to national recovery, and I wish to thank all the parties to recent discussions for helping to bring about this successful outcome,” NOC’s chairman Mustafa Sanalla said in a statement.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done. We also must take steps to ensure Libya’s oil production is never again held to ransom,” Sanalla added.
The lifting of force majeure at Libyan ports weighed on oil prices early on Friday, together with record new coronavirus cases in the United States and rising inventories in the U.S., which spooked the market about the trend in demand recovery. Both benchmarks were losing around 1 percent at 8:00 a.m. EDT, but had recovered into positive territory by 10am.
By Charles Kennedy for Oilprice.com
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