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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Oil Prices Slide As Libya Restarts Production

Libya’s National Oil Corporation will restart production from certain fields and some exports of crude oil, the company said, as quoted by local media, adding that it will only restart production at “safe” fields and exports from safe ports.

“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.

The force majeure will be lifted from fields and ports that are free of the presence of paramilitary groups and mercenaries, but remain in effect for those where there are still such groups, which hamper the work of NOC, the company said.

The head of the Libyan National Army 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. On the same day, NOC’s Sanalla said the force majeure will be lifted from the facilities only after they are demilitarized.

Currently, oil production in Libya is just 100,000 bpd—down from 1.2 million bpd at the start of the year, just before the blockade in January.

In recent weeks, rival factions and the foreign powers supporting them have been negotiating some kind of an agreement that could lead to Libyan oil returning to the global market at a time of weak demand recovery and weak oil prices. The latest news is likely to arrest or even reverse an improvement in oil prices that followed OPEC+’s latest meeting that offered a glimmer of hope for supply, if not demand.

But now that Libya will start bringing production back on, things may well change as the OPEC+ agreement relied on the country’s involuntary contribution to the overall supply curbs.

By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on September 21 2020 said:
    It isn’t the announcement that Libya will restart crude oil production from certain fields and some exports that is causing the oil price to slide. Libya’s impending production will go towards covering the domestic needs of the country. Therefore, it will have no impact on global oil supplies and prices.

    What is behind the price slide is the manipulation of oil prices by investment Banks, financial institutions and oil traders for the sake of making profits.

    Even Saudi Energy Minister Prince Abdulaziz bin Salman was forced to issue a stern warning to short sellers not to bet against the price of the commodity saying “We will never leave this market unattended. I want the guys in the trading floors to be as jumpy as possible. I’m going to make sure whoever gambles on this market will be ouching like hell.”

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Carlos Blanco on September 21 2020 said:
    So much for the hope for oil price recovery. At the end of the day no countries would want to continue to to restrict their cash flow for too long.

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