• 4 minutes Your idea of oil/gas prices next ten years
  • 7 minutes WTI Heading for $60
  • 13 minutes Could EVs Become Cheaper than ICE Cars by 2023?
  • 22 mins Pros and Cons of Coal
  • 4 hours Why does US never need to have an oil production cut?
  • 2 days Pence says South China Sea Doesn't Belong To Any One Nation
  • 3 days Anyone holding Nvidia stock?
  • 5 hours US continues imports of Russian gas which it insists Europe should stop buying
  • 10 hours Is California becoming a National Security Risk to the U.S.?
  • 2 days Germany Discusses Lifting Ban on Deporting Syrians
  • 12 hours Regular Gas dropped to $2.21 per gallon today
  • 6 hours Warren Buffett
  • 3 hours And Just Like That, Everybody Stopped Talking About $100 Oil
  • 1 day Trump administration slaps sanctions on Saudis over Khashoggi's death
  • 3 days I Believe I Can Fly: Proposed U.S. Space Force Budget Could Be Less Than $5 Billion
  • 3 days China Claims To Have Successfully Developed a Quantum Radar That Can Detect 'Invisible' Fighter Jets
Alt Text

New Tech Could Save Big Oil $7 Billion Per Year

The upstream sector could save…

Alt Text

Oil Prices Tumble As Iran Sanctions Set In

There was uncertainty in oil…

Alt Text

The Trojan Horse In Oil Markets

Iran sanctions have been at…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Disaster Looms Over Libyan Oil

Is General Khalifa Haftar dead or alive? The leader of the Libyan National Army disappeared from the public eye earlier this month, and now rumors surrounding his health are beginning to circulate. Some media reports say he is dead, others insist he is alive.

If we are to trust a quote by Libyan Express of the French foreign minister, Haftar is alive and recovering after medical treatment in Paris. Yet, the possibility of him losing his position of power has already fueled fears about the future of Libya and its oil wealth. These fears are very likely to stoke oil prices further.

Haftar’s LNA, affiliated with the eastern Libyan government based in Tobruk and not recognized by the UN, was responsible for the revival of Libya’s oil industry after two years ago it retook the four export terminals in the Oil Crescent from the Petroleum Facilities Guard. The LNA made it possible for the National Oil Corporation to lift the country’s daily production rate to 1 million barrels and above. That’s up from about 300,000 bpd before the takeover of the terminals.

The task has not been easy, however, and this fact highlights the dangers inherent in what could turn out to be an inflection point for Libyan politics and oil. As one commenter, Tarek Megerisi, said, even if he is alive, Haftar is an elderly man and no certain successor for him at the helm of the LNA has been picked. Related: Canada’s Oil Patch To Turn Profitable In 2018

Libya’s recovering oil production has been a swing factor for oil prices since 2016. When it was on the rise, prices fell. Yet there were so many outages as various groups vied for attention and money by blockading pipelines and oilfields that prices rose on news from Libya pretty much as often as they fell on reports from the North African nation that sports the largest oil reserves on the continent.

In this context, it’s safe to assume the first thing that happens in case Haftar is incapacitated would be a resurgence of rival factions, including extremists that he squashed, seeking to regain lost ground and influence. Those intimately familiar with the situation in Libya such as Megerisi note that the LNA itself is far from a solid, coherent organization. There are internal rivalries as the army is made up of regular military personnel, tribal forces, and various militias. So, the short version of what will happen in case of Haftar’s demise is chaos.

Analysts interviewed by CNBC have suggested that if the LNA gets beheaded, its rivals—and probably parts of it—will rush to the Oil Crescent to secure control over whatever part of the oil producing and exporting infrastructure they can. Production will naturally be disrupted and so will exports, until the dust settles, if ever.

One conservative estimate of the effect of this chaos on oil production from Eurasia Group is for a 200,000-bpd decline. This is an amount substantial enough to push prices higher, especially now that global supply is tightening thanks to OPEC’s efforts, but mostly on the back of Venezuela’s strife. Exactly how high prices will jump is difficult to say, but with a sufficient degree of chaos in Libya, Brent could inch a lot closer to the US$80 level that Saudi Arabia now eyes as its preferred price. Related: Is Saudi Arabia Losing Its Asian Oil Market Share?

And there’s something else. Even if Haftar is alive and indeed well, chaos may resurface. Yesterday media reported that the LNA’s chief of staff survived an assassination attack with a car bomb. Though it is unclear who was behind the attempt, Libya experts believe the LNA is a blink away from internal fragmentation, which will doubtless spread outside the organization and embolden rival groups to make a power grab for the country’s oil.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
-->