I have preferred to term this strategy a bluff only because Libya’s share in global oil markets is paltry. Export or no export is hardly of any consequence. Dissemination of such reports by the Western media facilitates the fund managers to drive the market and make windfall profit.
Reportedly, Libyan National Oil Company (NOC) has declared force majeure on another key Libyan oil field, the 300,000 bpd Al Sharara, amid protests that had shut down production at two ports and the El Feel oilfield on Sunday.
NOC said, “A group of individuals put pressure on workers in the Al-Sharara oil field and forced them to gradually shut down production and made it impossible for the NOC to implement its contractual obligations”.
The NOC said it was “obliged” to declare a state of force majeure on Al Sharara “until further notice”.
Al-Sharara is Libya’s biggest oilfield, and the move effectively suspended all Libyan oil production and exports.
On Sunday, the NOC said that loadings of crude oil at two Libyan ports had been suspended amid anti-government protests that were interfering with oil industry operations.
Loading from the Mellita terminal was suspended following a shut down in production at the El Feel oil field, with the NOC stating that individuals were preventing the field’s workers from continuing production.
Also on Sunday, the NOC shut down operations at the Zueitina export terminal over protests calling for the resignation of incumbent Prime Minister Abdul Hamid Dbeibah.
The NOC has been eyeing a ramp-up in production to 1.4 million bpd for Libya, but a new political battle is setting the stage for potential return to civil war. Libya has been producing around 1million bpd since the beginning of this year.
Two rival governments have now emerged in Libya, with incumbent Prime Minister Deibah refusing to step down for newly sworn-in eastern Prime Minister Fathi Bashaga, who last week said his forces would take over the capital Tripoli peacefully.
The latest protests that have led to force majeure appear to be engineered by supporters of the Bashaga to gain control of the oil industry from supporters of the incumbent Dbeibah.
Early on Monday, the initial force majeure declarations pushed oil prices higher, with Brent trading above US$111 per barrel.
With the latest force majeure declaration for Al-Sharara, oil prices are pushing higher still, with Brent at US$113 at the time of writing and WTI above US$108.
