Oil Toil
Libya’s Oil Surge Lasts Just One Week

Well that didn’t last long. Last week we noted that Libyan oil production jumped 160,000 barrels per day after its biggest oil field reopened. That resurgence was short-lived after that field was shut down again this week, and Libya’s oil output fell 30 percent to a six month low. Bloomberg reports:

The North African nation’s output dropped to 490,000 barrels a day from 703,000 a day after the Sharara field shut, a person familiar with the situation said, asking not to be identified because of a lack of authorization to speak to media. Sharara pumped about 213,000 barrels a day before halting on April 9, the person said. The country is currently producing at its lowest level in more than six months, data compiled by Bloomberg show.

The pipeline that transports crude from Sharara in western Libya to the Zawiya refinery also stopped operating on April 9. The National Oil Corp. declared force majeure the same day on loadings of Sharara crude from the Zawiya terminal, according to a copy of the NOC’s decree obtained by Bloomberg.

Moscow won’t be happy at this latest delay, as the Russian state-owned oil company Rosneft has recently gotten into business with Libya’s National Oil Corp. (NOC). The fact that NOC is still having this much trouble getting production up and running again will be concerning to the Kremlin, which has been making significant energy investments around the world in recent months.

OPEC’s other members, however, won’t mind seeing Libya continue to struggle to regain its 1.6 million barrel per day production capacity (last seen in 2011, before the NATO intervention and toppling of the Qaddafi regime). After all, the name of the game for petrostates these days is reducing output in order to erase a global glut and hopefully nudge prices upward.

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