Libya’s crude oil production
Libya is an OPEC member. A Reuters survey estimates that Libya’s crude oil production rose by 50,000 bpd (barrels per day) to 930,000 bpd in September 2017—compared to the previous month. Production is near a four-year high due to the restart of the Sharara oilfield in September 2017—the largest oilfield in Libya.
A rise in Libya’s crude oil production is bearish for crude oil (BNO) (USO) prices. Lower crude oil prices have a negative impact on oil and gas producers (IXC) (IYE) like Saudi Aramco, Rosneft, and Chevron (CVX).
Crude oil production peak and low
Libya’s crude oil production peaked at 1.8 MMbpd in March 2008. In contrast, production hit 0.1 MMbpd in September 2011 due to the civil war in Libya.
Meanwhile, Libya’s crude oil production hit 1,005,000 bpd in July 2017—the highest level in four years.
Libya and OPEC’s production cut deal
Libya was exempt from the production cut deal due to political and economic instability in the country. Libya’s crude oil production has risen ~40% or by 250,000 bpd since January 2017.
Sharara oilfield closed
On October 1, 2017, militants attacked Libya’s Sharara oilfield. The National Oil Corporation of Libya said that production activity has been shut down. The Sharara oilfield produces 270,000 bpd of crude oil—25% of Libya’s crude oil production.
Libya plans to produce 1.25 MMbpd of crude oil by December 2017. A rise in crude oil production from Libya would pressure crude oil (BNO) (UWT) (UCO) prices. However, a supply outage in Libya could benefit oil prices.
In the next part, we’ll look at how Saudi Arabia’s crude oil production impacts crude oil prices.