Libya oil shutdown continues amid partial restart

Libya has yet to resume oil exports a week after the Haftar clan stalled production in an attempt to gain leverage over a battle for control of the Central Bank. Six engineers told the pan-Arab newspaper Asharq-Al-Awsat that exports remained halted at the ports of Es Sidra, Ras Lanouf, Hariga, Zueitina, Brega and Sirte, although some production increased to feed local energy production and to reduce the fuel shortage.

According to S&P Global, crude oil production up to 230,000 b/d was restored in three eastern fields under the control of warlord Khalifa Haftar, a far cry from Libya’s output of 1.15 million b/d in July. Libyan crude exports hit multi-year highs in April, with refineries in northwest Europe and The Mediterranean appreciates light Libyan sweets.

The development of Libya is very important for the oil markets because it represents “real barrels losteffectively tightening the physical market for as long as the Libyan crisis lasts, UBS analyst Giovanni Staunovo told Bloomberg.

Periodic instability in Libya’s oil production has been a recurring feature since the First Libyan Civil War in 2011, with commodities analysts at Standard Chartered estimating that it has resulted in a loss of just over 4 billion barrels of output and cost the country North African 320 billion dollars in losses. income. However, the Libyan oil shutdown failed to lift oil prices due to heightened fears of a hard landing in the US economy as well as a bearish outlook for 2025. Brent crude for October delivery fell from 81.25 USD/barrel a week ago at USD 76.89. in Monday’s intraday session, while the corresponding WTI contract fell from $77.17/barrel to $73.60 in the timeframe.

According to StanChart, the continued trend in the oil markets is hard to justify given the healthy fundamentals. For example, U.S. crude oil inventories fell sharply, with the cumulative decline in inventories over the past eight weeks reaching 34.7 million barrels, an average of 620,000 barrels per day (kb/d).

By Alex Kimani for Oilprice.com

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