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Libya’s crude oil production has exceeded 1 million bpd for the first time since June, when port blockades and a kidnapping caused production outages that within a month brought production to as little as 670,000 bpd.
S&P Global Platts cites sources from Libya’s oil industry as saying the improvement came on the back of production growth at the country’s largest producing field, Sharara. Last week, Sharara pumped 218,000 bpd, but this has now grown to more than 250,000 bpd, the sources said.
The field, which has a capacity to pump 340,000 bpd of crude, was shut down in June after a militant group kidnapped four employees. Surrounding fields were also shut down to avoid more kidnappings.
Separately, militants tried to take a couple of the country’s oil export terminals, but were pushed back by the Libyan National Army, which then, in a twist, decided to not hand over control of the ports to the internationally recognized National Oil Corporation but to the entity of the same name that is affiliated with the eastern Libyan government.
Eventually the LNA and the legitimate NOC came to an agreement, and NOC resumed control of the export ports, which put an end to the production suspensions. However, the situation in the divided country remains highly volatile politically, which means other outages are more a question of time than anything else.
This will cement Libya’s status as a wild card on the global oil market, capable of swinging prices in one direction or the other in a matter of hours.
At the same time, production has been relatively stable at around 1 million barrels daily since last August, when the LNA took the oil ports from the Petroleum Facilities Guard. It hit a high of 1.28 million bpd this February. Also, outages resulting from pipeline or field blockades are being dealt with in a matter of days, which has heightened the stability of supply. Still, the risk of further blockades and kidnappings remains high. By Irina Slav for Oilprice.com