Libya’s crude oil production is set to plummet as operations at its biggest Sharara oil field were halted after an unknown armed group closed a pipeline valve, sources familiar with the matter said. the 3 of March.
It comes on the same day that exports of Libyan crude from six of its oil terminals were temporarily suspended due to bad weather, according to state-owned National Oil Corp.
An armed group has closed a key valve in the pipeline that connects the 300,000 bpd Sharara field to the Zawiya terminal, sources said. Such incidents have become quite common in Libya, as the country’s oil industry has been at the mercy of groups vying for control of valuable assets since the 2011 civil war, with armed attacks on key pipelines and production facilities. .
Sources also said the country’s main oil workers’ union, the General Union of Oil and Gas Workers, was mobilizing to launch a protest at the port of Zueitina to demand a pay rise and more bonuses.
Bad weather had affected crude loadings at the 300,000 bpd Es Sider, 250,000 bpd Zawiya, 200,000 bpd Ras Lanuf, 90,000 bpd Brega, 90,000 bpd Zueitina terminals and terminals 70 000 bpd Mellitah, according to NOC.
The outages will add pressure to a tight oil market that is already struggling to adjust to Western sanctions on Russia over its invasion of Ukraine.
Dated Brent, on which most grades of Libyan crude are priced, jumped again on March 3 to $119.81/bbl, according to Platts’ valuation by S&P Global Commodity Insights. Two of Libya’s grades are priced against Russian Urals crude, which has been priced at a record $22.23/bbl discount to dated Brent for shipments to Rotterdam.
Libyan port closures due to bad weather have become quite common in recent months. The lack of storage at some of Libya’s main oil terminals means that NOC sometimes resorts to closing the taps at its main oil fields if the ports are closed for a long period.
Many of these terminals, as well as the country’s major pipelines and production facilities, have come under regular armed attack since the 2011 civil war.
Libya relies on nine oil terminals for its crude exports. Exports from the 250,000 bpd Marsa el-Hariga, 30,000 bpd Bouri and 30,000 bpd Farwah terminals are still ongoing.
Libyan crude output rose steadily in February to 1.15 million to 1.20 million bpd after falling sharply in December and January, Libyan sources told S&P Global.
Exports in February averaged 1.11 million bpd, compared to 920,000 bpd in January, according to preliminary data from commodity intelligence firm Kpler.
Libya holds Africa’s largest proven oil reserves, and its main light sweet export crudes Es Sider and Sharara are sought after by refineries in the Mediterranean and North West Europe for their gasoline yields and middle distillates.