Libya’s crude oil production
Libya’s National Oil Corporation reported that the country’s crude oil production rose to ~700,000 bpd (barrels per day) in January 2017. Production is at the highest level in the last three years. The rise in crude oil production from Libya could pressure crude oil (USO) (XLE) (PXI) (ERX) prices. For more on crude oil prices and drivers, read Part 1 of this series.
Libya is a member of OPEC (Organization of the Petroleum Exporting Countries). The EIA (U.S. Energy Information Administration) estimates that Libya’s crude oil production rose by 58,000 bpd to 678,000 bpd in January 2017—compared to the previous month. Production rose 9.4% month-over-month and 83% year-over-year.
Libya’s crude oil production estimates
Libya produced ~1.8 MMbpd (million barrels per day) of crude oil in 2008. Civil war and militant attacks on the country’s oil infrastructure caused the fall in Libya’s crude oil production.
On February 16, 2017, Libya’s National Oil Corporation reported that the country could produce 1.25 MMbpd of crude oil by the end of August 2017 if all of the blockades on its ports are cleared. However, Libya is prone to political turmoil and security concerns.
The fall in Libya’s crude oil production after 2010 was one of the factors that kept global crude oil prices elevated until mid-2014.
Libya’s crude oil exports
On December 19, 2016, Libya’s biggest port, Es Sider, reopened after two years. It had been shut down due to militant attacks. Es Sider’s capacity before the militant attacks was at 350,000 bpd. Currently, it’s operating at much lower levels. The rise in exports and production from Libya could pressure crude oil (SCO) (XLE) (DIG) (IEZ) prices.
Libya and Nigeria were exempt from a crude oil production cut at OPEC’s meeting on November 30, 2016. For more updates, read Reality Check: Major Oil Producers’ Output Cut Plans. Iran was allowed to increase its crude oil production by 90,000 bpd. Rises in crude oil production from Iran, Libya, and Nigeria could pressure crude oil prices.
Iran’s crude oil production could be a game-changer for the crude oil market. We’ll discuss this in the next part.