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As a rather bullish sentiment has fallen over the oil markets, Libyan oil production is now set to rise after disruptions at the Sharara oil field are now behind it, according to a new report by Bloomberg.
Total output will reach 950,000 barrels per day as the Organization of Petroleum Exporting Countries (OPEC) battles a supply glut to force an increase in global oil prices.
The Sharara field, the largest in the North African country, reached 230,000 bpd this week, according to an anonymous source that spoke to Bloomberg. In August, Libyan production had reached 1.05 million bpd, but weeks of unrest at major fields had since caused the growth to falter.
OPEC should approach Libya and Nigeria, the two exempted OPEC members who were allowed to continue raising their crude oil output despite the November 2016 deal, Iran’s Oil Minister Bijan Namdar Zanganeh told journalists earlier this week. The official said that OPEC members are compliant with their lower production quotas at an “acceptable” level, but rising supply from Libya and Nigeria is hampering the cartel’s efforts to rebalance the oil market.
“OPEC’s actions are working and compliance is acceptable overall, although there needs to be some change,” Zanganeh said, as quoted by Bloomberg. “Changes are really related to Libya and Nigeria and the 100 percent compliance of everyone.”
The African duo had been granted exemptions from the OPEC deal due to their own versions of domestic strife. Instability and active militant groups have caused output in both countries to drop significantly in the months and years leading up to the Vienna summit that forged the quotas now in implementation.
Libya and Nigeria have collectively added about 550,000 bpd since the original deal was agreed to last year. That amount has offset about half of the output reduced by the rest of OPEC; the group agreed to cut production by 1.2 million bpd.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…