Libya’s National Oil Corporation (NOC) sees oil production rising to around 260,000 barrels per day (bpd) next week, up from some 100,000 bpd before the blockade of its oil ports and oilfields was lifted at the end of last week.
According to an NOC post on Facebook, carried by The Libya Observer, NOC is also proceeding with arranging for oil tankers to start arriving from Wednesday to ship crude from oil ports that are safe and not occupied by armed groups.
Crude shipments will resume from the ports of Brega and Hariga at first and will be later followed by other ports, depending on the safety and security situation, NOC said.
Over the weekend, Libya’s state oil corporation lifted the force majeure on the oil terminals it considered safe, and said it would restart production from certain fields and some exports of crude oil. NOC will only restart production at “safe” fields and exports from safe ports, the company said.
“Our main concern is to start production and exports taking into account the safety of workers and operations, as well as to prevent any attempts to politicize the national oil sector, which means that the NOC is doing its technical and non-political mission to resume operations in the safe areas and a technical evaluation is under way in preparation for the start of production and exports,” NOC’s chairman Mustafa Sanalla said. Related: Oil Prices Slide As Libya Restarts Production
The head of the Libyan National Army (LNA), General Khalifa Haftar, whose troops, with help from affiliated groups, blockaded Libya’s oil ports in January, announced the end of the blockade on Friday.
The prospect of Libyan oil returning to the oil market struggling with weak demand recovery contributed to the sell-off in oil on Monday.
“Obviously, the global oil market is in a fragile state, given the slower than expected demand recovery, therefore any additional supply is only going to make efforts from OPEC+ to rebalance the market more difficult,” ING strategists Warren Patterson and Wenyu Yao said.
Commenting on Monday’s sell-off in oil, John Hardy, Head of FX Strategy at Saxo Bank, said:
“Together with the expected reopening of Libya’s oil industry, the market took fright with Brent falling to $41/b, the 61.8% retracement of last week’s rally.”
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By Tsvetana Paraskova for Oilprice.com
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Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London