LONDON (Reuters) – Two weeks into an easing of a blockade by eastern forces on Libya’s oil infrastructure, the OPEC member is seeing a ramp up in oil production, which has risen nearly three-fold to hit 270,000 barrels per day this week.
Since the toppling of the regime of Muammar Gaddafi in 2011, oil production in the country has been on a roller coaster, with multiple disruptions over the years crippling its ability to export crude, its primary source of income.
(Graphic: Libya Oil Output – https://graphics.reuters.com/LIBYA-OIL/qmyvmbwlbpr/chart.png)
Exports have nearly doubled to 200,000 barrels per day in September on a monthly basis, according to oil analytics firm Vortexa.
Exports are expected to rise even further, bar any new disruptions, with the reopening of the Marsa El Hariga, Brega and Zueitina terminals.
(Graphic: Libya Crude and Condesate Exports – https://graphics.reuters.com/LIBYA-OIL/rlgpdjeydpo/chart.png)
With a weak demand outlook due to the spread of COVID-19 infections dragging on oil prices, additional supplies from Libya threaten to prolong market rebalancing, which the Organization of the Petroleum Exporting Countries (OPEC) is aiming to do.
Some analysts, however, remain sceptical that the beleaguered producer can raise and sustain production levels.
“It remains to be seen whether the North African OPEC member can maintain this new status quo (doubtful) but it has to be noted that the current increase in production should be manageable for OPEC,” Tamas Varga of oil brokerage PVM said.
(Reporting by Ahmad Ghaddar; editing by David Evans)