Libya’s National Oil Corporation (NOC) lifted on Wednesday the force majeure on four ports in the eastern part of the country after the export terminals were handed over to the Tripoli-based internationally recognized Libyan oil company.
“Production and export operations will return to normal levels within the next few hours,” the NOC said in a statement today, lifting the ten-day force majeure on the ports of Ras Lanuf, Es Sider, Hariga, and Zuetina, which had crippled Libyan production. Analysts and market participants were worried that this supply disruption reduced global oil supply amid plunging Venezuelan production, an outage in Canada’s oil sands, and looming sanctions on Iran’s oil, and would push oil prices further upwards.
Last month, after two weeks of fighting with several other armed groups at Libyan ports, the Libyan National Army (LNA)—an eastern government-affiliated militia—decided to give control of the ports to the eastern NOC.
The two NOCs—the eastern NOC and the Tripoli-based NOC—have been vying for control over Libya’s oil riches for years. At one point, they agreed to start working together to make the best of the resources, but the agreement did not last long.
Libya’s oil production came to a halt at the beginning of July, after the Tripoli-based NOC declared force majeure on crude oil loadings at the Hariga and Zuetina oil terminals, adding to the force majeure at the Ras Lanuf and Es Sider terminals. The NOC confirmed on July 2 that the total daily production loss amounted to 850,000 bpd of crude oil.
Today, NOC said that its chairman Mustafa Sanalla and the board of directors “commended the Libyan National Army General Command for putting the national interest first.” Related: A Storm Is Brewing For U.S. Oil Exports
“We need a proper national debate on the fair distribution of oil revenues. It is at the heart of the recent crisis. The real solution is transparency, so I renew my call on the responsible authorities, the Ministry of Finance and Central Bank, to publish budgets and detailed public expenditure,”
Sanalla said in the NOC’s statement.
News of the Libyan ports reopening sent oil prices down—with Brent Crude dipping 2.08 percent at $77.22 at 07:20 a.m. EDT on Wednesday, and WTI Crude losing 0.61 percent at $73.66—also dragged down by the U.S. announcement that it could impose tariffs on additional US$200 billion worth of Chinese imports.
By Tsvetana Paraskova for Oilprice.com
ADVERTISEMENT
More Top Reads From Oilprice.com:
- Chinese Refiner Stops U.S. Oil Imports, Turns To Iranian Crude
- The Critical Chokepoint That Could Send Oil To $250
- How Bad Is Iran’s Oil Situation?
