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Libya’s Election Chaos Threatens Oil Production And Exports

Libya’s oil production and exports are threatened again as the presidential election slated for December 24 will likely be postponed.

Armed groups descended in the capital Tripoli on Tuesday amid the election chaos, while the largest oilfield in the country was shut down by militias earlier this week.

Two days before the election scheduled for Friday, December 24, no final list of candidates has been published, and few believe the vote will go ahead. The head of the election commission in Libya closed the election committees on Tuesday, which makes analysts and observers seriously doubt that the poll will proceed as planned.

“The current mobilization of forces affiliated with different groups creates tensions and increases the risk of clashes that could spiral into conflict,” the United Nations Support Mission in Libya (UNSMIL) said on Tuesday.

“The developments in Tripoli do not bode well for the ongoing efforts to maintain stability and establish security and political conditions conducive to peaceful, credible, inclusive, free, and fair elections,” the UN noted.

Libya, whose oil production was 1.140 million bpd in November according to the latest OPEC Monthly Oil Market Report (MOMR), is exempted from the OPEC+ production cuts precisely because of its fragile security situation with a civil war still ongoing ten years after the toppling of Muammar Gaddafi in 2011.

In recent months, Libya’s oil production and exports had enjoyed relative stability, and the country planned to raise crude output, a crucial source of state income but also the bone of contention in the allocation of said oil revenues.

However, with the December 24 presidential election approaching, chaos and clashes returned, and armed factions stopped production at oilfields again.

On Monday, Libya declared force majeure on its oil exports after crude oil production had been shut in from four of Libya’s oilfields, including the largest 300,000-bpd El Sharara field. Other oilfields that are shut in include El Feel, Wafa, and Hamada. The oilfields were shut in by members of the Petroleum Facilities Guard (PFG), which is tasked with protecting the oilfields, according to Libya’s National Oil Corporation (NOC). The PFG reportedly closed a valve on a pipeline going from Sharara to the Zawiya port, and another valve from Wafa to Mellita.

By Tsvetana Paraskova for Oilprice.com

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