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Libya Adds To Oil Glut As Exports At Eastern Ports Set To Resume

A tanker is ready to load over 600,000 barrels of oil at the Ras Lanuf terminal, the first to arrive at this Libyan port since 2014, Reuters reported on Thursday, a sign that Libya is ready to inject thousands of barrels of oil per day into the market, exacerbating the global oil glut.

Libya’s National Oil Corporation (NOC) lifted on Thursday force majeure at all ports in the so-called Oil Crescent, resuming oil exports.

NOC chairman Mustafa Sanalla accepted handover of the ports from the Libyan National Army (LNA) reporting to the House of Representatives. Over the weekend, the LNA took control of oil export terminals in the Oil Crescent, wrestling them from the Petroleum Facilities Guard (PFG), which is affiliated with the UN-backed Government of National Accord. LNA forces, led by General Khalifa Haftar, seized the four major oil ports of Sidra, Ras Lanuf, Zuetina and Al-Brega in a military operation that resulted in zero casualties.

The ports are secure and NOC has been in contact with foreign commercial partners, Sanalla said in the company’s statement on Thursday.

The recently reunified NOC has also announced that it will start exporting 600,000 barrels of oil per day in just four weeks. The company also said that it would ramp up production and exports to 950,000 barrels per day before the end of the year. That’s up from the approximately 250,000 bpd the country is exporting right now.

According to an oil official, production has resumed at the Nafoura field, where crude pumping was suspended in November 2015 due to force majeure at the Zueitina oil terminal.

Good as it is for possible peace in Libya, the higher exports is bad news for the oil market because it could further worsen the glut.

Apart from Libya, signs of higher output emerge in Nigeria as well. For the first time since ExxonMobil (NYSE:XOM) declared force majeure on Nigeria’s Qua Iboe oil exports in July of this year, the U.S. oil company is set to offer Qua Iboe crude cargo for October loading. In addition, Royal Dutch Shell (NYSE:RDS.A) lifted its force majeure on Nigeria’s Bonny Light crude exports.

By Tsvetana Paraskova for Oilprice.com

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