Libya’s oil production falls as political crisis persists

Libya’s crude exports have fallen further in the past week as UN-brokered talks between the rival governments have yet to lead to a definitive agreement on the leadership of the country’s central bank, the sole guardian of Libyan oil revenues.

Over the past week, Libya’s crude oil exports averaged about 314,000 barrels per day (bpd), down from 468,000 barrels per day of crude delivered in the first five days of September, according to tracking data from tanks compiled by Bloomberg.

The most recent crisis in Libya erupted in late August.

A share of Libya’s production and exports were stopped due to a political deadlock over OPEC producer central bank leadership.

Oil production at several Libyan oil fields was halted on August 27 after the rival government in the east announced a halt to Libyan oil production and exports.

Libya, which pumps about 1.2 million barrels a day of oil, was submerged in a deeper political crisis over the line about the leadership of the Central Bank of Libya, the only internationally recognized depository of Libya’s oil revenues.

The internationally recognized government in the western capital, Tripoli, was seeking to replace Sadiq Al-Kabir, the governor of Libya’s Central Bank. This led to the most recent controversy between eastern and western governments and political factions, threatening again to reduce Libya’s oil production and exports.

Last week, Libya’s political factions were at loggerheads reached an agreement on the mechanism and deadlines for the appointment of the Governor of the Central Bank and the Board of Directors in the consultations hosted by the United Nations Support Mission in Libya (UNSMIL).

However, the situation remains uncertain.

Thursday, UNSMIL said that, despite two consecutive days of consultations, he “regrets that the two sides have not yet reached a final agreement”.

This uncertainty leaves Libya’s oil sector in a precarious position, with analysts warning that the ongoing political impasse could prevent a full recovery in crude exports in the near future.

By Michael Kern for Oilprice.com

More top reads from Oilprice.com