Closing of Libya’s biggest oil field likely to increase supply woes

/ Oil & Gas / Tuesday, 19 April 2022 07:59

Shutting down of Libya’s biggest Sharara field in the west of the country, which can pump 300,000 bpd could add to the already existing oil supply disruptions.   

Libya's National Oil Corp. (NOC) has raised alarm bells that such closures of oil fields could drastically impact their contractual obligation on deliveries. NOC declared force majeure on deliveries of Mellitah crude oil exports after the El Feel (Elephant) oil field, which produces 70,000 bpd, was also closed.

Per market estimates, the country's output is down by 535,000 bpd and is headed for a downward spiral.

The outages in Libya have increased concern over tight global oil supply which has already reached a critical point with the disruption in supply chain as a result of Russia’s invasion in Ukraine.

Oil prices rose over tight global supply after Libya’s shutting down of production and some factories in Shanghai deciding to reopen post a COVID-19 shutdown.

Brent crude futures rose 61 cents, or 0.5%, to $113.77 a barrel, while US West Texas Intermediate (WTI) crude futures gained 33 cents, or 0.3%, to $108.54 a barrel.

Latest Issue

Please publish modules in offcanvas position.