Political Strife Causes Libyan Crude Oil Output to Fall

Posted by Kayrros


July was a hectic month for Libyan production, with political strife erasing the recent gains made in the oil sector. The aftermath of fighting at eastern Libyan ports and abductions at Sharara led to an exacerbated drop in production in July, which fell about 20% from Kayrros measurements in June.

In late June, an attack at the Ras Lanuf facilities caused four tanks to go offline. Satellite imagery showed the tanks burning, with the black smoke of lit crude billowing in the air.

Because of the fighting, a significant amount of storage was lost. Four other tanks were already offline, bringing the total to eight tanks offline in July. The event caused force majeure to be declared at the site, which remained in effect for several weeks.

Kayrros estimated the June production based on independent measurements of field production, shipping data, and inventories — an estimate that differed significantly for the first time from OPEC reporting.

Lower production means less exports. In July, the Kayrros Libya Exports Tracker measured a slight drop in exported crude, with the largest drop coming from Zawiya.

Kayrros estimates that more production capacity started to come online at the Elephant oil field and the Sirte basin fields on July 13, reducing the total shut-in production in Libya.

In the Murzuq basin, a long-standing dispute between local tribes and guards at the Elephant oil field was resolved in early July, allowing production to restart. The dispute had shut down the field since mid-February and was a major source of lost production in the country.

The Kayrros Libya Crude Oil Inventory Tracker measured a draw in July, led by Zawiya. Inventories in Es Sider and Ras Lanuf also dropped after the reopening of the eastern ports following the attacks.

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