Libya supply drop threatens to further tighten global oil market

Libya supply drop threatens to further tighten global oil market

Bloomberg/Cairo

Libya’s oil exports have fallen to about a third of last year’s level after the worsening political crisis prompted the suspension of shipments from two of the nation’s biggest ports.

Force majeure has been declared on crude shipments from Es Sider and Ras Lanuf, the country’s largest and third-biggest export terminals, the National Oil Corp confirmed in a statement late Thursday. The ports of Brega and Zueitina haven’t handled any crude for almost two months.

The drop in Libya’s supply threatens to further tighten the global oil market. Brent crude has risen by about 40% this year following the invasion of Ukraine.

Libya’s crude and condensate exports have declined over the past four months to a 20-month low of 610,000 barrels a day in June, according to tanker-tracking data compiled by Bloomberg.

The latest port closures are crimping export flows even further. According to Libya’s national oil company, crude exports now range from 365,000 to 409,000 barrels a day. The nation, a member of the Organization of Petroleum Exporting Countries, sold an average of 1.1mn barrels a day to overseas markets last year, Bloomberg data show.

The key El Feel field, which is linked to the port of Mellitah is also subject