Libya’s estimate for its April oil revenues came in as one of its best in a long time, suggesting that the stalemate between the GNA and LNA is yet to impact oil production. It’s not all good news for Libya though, as ISIS is now taking advantage of the security vacuum that has been created by Haftar’s forces focusing on Tripoli.
Regarding oil revenues, the NOC reported $1.87 billion for April due to a rise in global crude oil prices and a busy loading scheduled at the end of March. This loading schedule resulted in cargo receipts both arriving and clearing in April’s revenue statement. The NOC reported a monthly increase of approximately $340 million (+22%).
Our team on the ground has obtained the official NOC documents:
Regarding security, the market should be concerned about ISIS, which launched an attack on Saturday at a checkpoint manned by Haftar’s LNA forces near a major oilfield in the south of the country. The oilfield – Zellah - is only 20 kilometers from the checkpoint in question, and is a clear signal of an intended move on the field. In the attack, our sources on the ground say that two LNA checkpoint guards were beheaded, and six others kidnapped.
The oilfield is owned by the Zueitina oil company.
In terms of the conflict for Tripoli, there are indications that it will be a lengthy one given external meddling. Most recently, that appears to have resulted in a shipment of weapons from Turkey…
Libya’s estimate for its April oil revenues came in as one of its best in a long time, suggesting that the stalemate between the GNA and LNA is yet to impact oil production. It’s not all good news for Libya though, as ISIS is now taking advantage of the security vacuum that has been created by Haftar’s forces focusing on Tripoli.
Regarding oil revenues, the NOC reported $1.87 billion for April due to a rise in global crude oil prices and a busy loading scheduled at the end of March. This loading schedule resulted in cargo receipts both arriving and clearing in April’s revenue statement. The NOC reported a monthly increase of approximately $340 million (+22%).
Our team on the ground has obtained the official NOC documents:

Regarding security, the market should be concerned about ISIS, which launched an attack on Saturday at a checkpoint manned by Haftar’s LNA forces near a major oilfield in the south of the country. The oilfield – Zellah - is only 20 kilometers from the checkpoint in question, and is a clear signal of an intended move on the field. In the attack, our sources on the ground say that two LNA checkpoint guards were beheaded, and six others kidnapped.
The oilfield is owned by the Zueitina oil company.
In terms of the conflict for Tripoli, there are indications that it will be a lengthy one given external meddling. Most recently, that appears to have resulted in a shipment of weapons from Turkey for the GNA to fight back Haftar’s forces. This has led to a significant escalation in fighting as of Tuesday.
But let’s put this into perspective in terms of who controls what: Even if this is a protracted battle, it is still in Haftar’s favor:

Investors Should Be Monitoring Argentina’s Upcoming Elections
Argentina is preparing to export its first LNG cargo for a new floating facility and to become the kingpin of a global lithium cartel, but elections are coming up in October and the pro-market Macri - the Western investor’s poster child for Latin America - may or may not survive politically.
The specter of Cristina Fernandez Kirchner is still haunting the political corridors of Buenos Aires, and despite the fact that she faces trial for corruption and embezzlement (a trial that started on Tuesday), she’s still gunning for the presidency. Over the weekend, Kirchner announced her candidacy as vice-president, running with presidential candidate Alberto Fernandez, who is a former Kirchner-era politician.
Our high-level sources on the ground - with access across the political sphere - say Kirchner’s move was entirely unexpected given the high-level of negative sentiment against her. Becoming the vice-president for Fernandez would be her way of controlling the presidency without directly running, and she may even have offered Fernandez a deal that would see him resign if he won and step down for her in return for another lucrative post elsewhere. That would give her the presidency without winning it, and also give her significantly more power against prosecutors who are aiming to take her down.
What happens next depends on the outcome of a series of events, beginning with Wednesday’s meeting of the Alternativa Federal, the Peronist opposition to Kirchner. At this meeting, they will decide on their candidate list, and what will make or break Kirchner is whether they field more candidates against her, or whether they consider her Fernandez puppet as a consensus candidate. The Peronists want to beat Macri, but some of them want to beat Kirchner more.
Investors want Marci, of course, and Kirchner’s populism would be devastating, but a few other candidates are closely aligned in theory with Macri’s pro-market ideas. Roberto Lavagna has just announced his candidacy, and he is a former minister of economy who may attempt to portray himself as “socialist-leaning” and slightly populist, but who is at heart an economist and very much against “Cristinismo”. We do not feel that investors have a great deal to fear from Lavanga. There is also Sergio Massa, who is a bigger threat because presently he is the only one of the anti-Kirchner faction of Peronists who might be willing to cut a deal with her. We will learn more on Wednesday, when the Peronists meet. Primaries will be held in August, for October elections.
US Warmongering on Iran Showing Cracks
Exxon was forced to withdraw some 80 staff from Iraq’s oil-rich Basra over ostensible Iranian threats to US interests in the fallout from Washington’s attempt to provoke Tehran. Now the acting US Defense Secretary is saying, vaguely, that the threat of attacks by Iran has been “put on hold” thanks to US counter-measures, while Trump has wavered back and forth about his intentions here, based on criticism coming from the Democratic camp. The Saudis continue to lobby for a war, and Yemen’s Houthis are happy to oblige, claiming to have launched an armed drone at the Najran airport in Saudi Arabia. It’s not the first time the Houthis have targeted this airport, which is right on the Saudi-Yemen border and is an easy target.
In the meantime, Iraqi is livid that Exxon has evacuated staff, calling it “unacceptable and unwarranted”, and noting that the south of Iraq is peaceful and secure and other oil companies (Lukoil, BP, Eni) have made no similar move and do not intend to. Reasonably, Iraq is worried about the false message this sends to investors and the market in general. On May 19th, a rocket attack in Iraq’s Green Zone has served to ratchet up tensions further. The attack was being headlined in the media as “near the US Embassy in Baghdad”, but we caution against this headline-grabbing ploy because the attack occurred (as readers learn further down in stories) a mile from the embassy, suggesting that the embassy was clearly not the target. The significance of the “attack” was that it was the first in the Green Zone in some 8 months, but there were no casualties, and authorities know little about the nature of the attack, other than that the rocket was fired from an open field and may have been fired from Eastern Baghdad, where there are known Iranian militias.
Global Oil & Gas Playbook
- Remember that contaminated Russian crude oil that traders were trying to sell to Europe? Now, according to shipping data (Reuters is paying attention), that same oil (700,000 tonnes) is being passed off to Asian buyers by traders Vitoland Unipec. This was a major upset for Russian oil because it resulted in a significant export reduction through its Druzhba pipeline to Europe. If the Europeans don’t want it, though, traders think they can fob it off on small Chinese refineries, for one. It’s a bit of a risk for the Chinese refiners, who are well aware the oil is contaminated with organic chloride, which can undermine refining equipment if not carefully and arduously diluted. If they can successfully dilute it, they will expect a major discount, of course. In the meantime, the contaminated Urals crude is still creating blowback in Europe, where French Total SA and Italian Eni have halted payments for oil purchased through Druzhba over the incident. The move is significant because based on Russian law (which is not in line with typical Western procedures) buyers have to pay regardless of whether the crude meets standards and then make a claim against it later for reimbursement, so Eni and Total are playing outside the normal Russian rules here. Total has temporarily closed a German refinery Mitteldeutschland due to the contaminated crude. Operations are expected to resume after the weekend using crude supplied via the Polish port of Gdansk.
- After drilling 18 holes off the coast of Karachi, Pakistan is calling it quits after making zero discoveries in the Arabian Sea area.
- Another five oil workers have been kidnapped in Nigeria’s Rivers state this week from an oil production site. Kidnappings again appear to have picked up momentum, and this recent case is the third in as many weeks. In April, four oil workers, including two Shell executives, were kidnapped (but later released under unknown conditions) in the Niger Delta region.
- Brazil’s Petrobras says its total oil production this year will contain 60% of pre-salt production (currently it is 49%). The state-run Brazilian giant was eyeing 2.8 million bpd this year, and already hit that target at the beginning of this month. It’s bound to increase, as well, with 7 newly operational FPSOs in less than a year and another 11 slated to become operational by 2023.
- Zimbabwe's energy regulator has increased diesel and petrol prices by 47%, effectively and suddenly scrapping subsidies. The move comes after the Central Bank got rid of the 1:1 dollar parity oil companies used to purchase dollars. We expect significant blowback in the form of violent protests from this. In January, another 150% hike in fuel prices led to such violent street protests, as well. Inflation is out of control in Zimbabwe, having hit 76% in April. The authorities are hoping to appease the public with subsidies for public transport.
- Dana Gas announced it has commenced drilling operations at its Merak-1 well, offshore Egypt, in the Eastern Mediterranean Basin. The well may contain up to 4 trillion cubic feet of natural gas, based on company estimates.
- The Cypriot government is now preparing to ramp up oil and gas exploration in response to Turkey’s plans to do its own drilling off the coast of Cyprus in waters that are part of Cyprus’ EEZ. Cypriot Energy Minister George Lakkotrypis said eight drilling operations are now scheduled over the next 24 months, while initially they were expected to begin by the end of this year or early 2020. Turkey is now planning to begin actual drilling in the disputed area in September. We continue to be concerned about this move because it goes beyond Erdogan’s normal provocations and there are indications that his declining popularity at home and increased isolation geopolitically are rendering him desperate. This time around, it seems that Erdogan is ready to take this to a conflict level and beyond the rhetoric. Much of this change has to do with the fact that he lost elections in Istanbul, which is a clear threat to his power. We expect this conflict to become very dangerous by September. (We also note, however, that Turkey has fully complied with Iran sanctions and closed its ports to Iranian oil after its waiver expired).
- Keep an eye on the upcoming OPEC+ meeting in June: The fact that the US is importing heightened levels of Russian crude, with 5 million barrels already touching land in the US this month. But what’s happening, essentially, is that Russia is going exactly the opposite of what the Saudis are trying to do. The Saudis are trying to reduce US crude inventory, but US imports are just replacing Saudi imports with Russian. That might be an OPEC deal-breaker.
- Saudi Arabia is also planning to buy LNG from San Diego-based Sempra Energy. The Saudis have sealed a 20-year agreement with Sempra to buy around 5 million tons of LNG per year. This is the Saudis first US LNG deal, and the product will come from Sempra’s Port Arthur facility in Texas (currently being developed). Sweetening the deal for the Saudis, Aramco will get a 25% equity investment in the facility--the value of which has not been disclosed.