Libya’s National Oil Company has said it expects oil production to rise to 260,000 barrels per day (bpd) from next week, as the OPEC member looks to revive its oil industry, crippled by a blockade since January, Reuters has reported.
Oil prices fell around 5% on Monday, partly due to the potential return of Libyan barrels to a market that’s already grappling with the prospect of collapsing demand from rising coronavirus cases.
According to the Reuters report, Libya produced around 1.2 million bpd – over 1% of global production – before the blockade, which slashed the OPEC member’s output to around 100,000 bpd.
The NOC said on Tuesday it was resuming exports at Zueitina oil terminal, in addition to Marsa El Hariga and Brega terminals, after assessing the security situation at the port and connected fields.
The state-run producer said it was still evaluating other ports and fields.
Eastern Libyan commander Khalifa Haftar said last week his forces would lift their eight-month blockade of oil exports.
But the extent and sustainability of the revival is uncertain. After repeated blockades and security problems, the NOC has said it will only resume operations at facilities devoid of military presence.
The lifting of the oil blockade has also triggered a political backlash in western Libya, due to concerns that terms announced by the deputy prime minister of the Tripoli-based government will cede some control over oil revenues to rivals in the east.
It is unclear how revenues will be used, pending a political deal to create a unity government.
Oil tankers are expected to begin arriving from Wednesday to load crude in storage. The Marlin Shikoku tanker is making its way to Hariga to load a cargo for trader Unipec, according to shipping data and traders.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, are closely watching the Libya situation, waiting to see if this time Libya’s return to the oil market is sustainable, sources told Reuters.
