Libya’s latest political crisis wiped out 570,000 b/d of its crude oil production in September, but with the standoff now resolved, output could come roaring back to surpass even pre-crisis levels, according to industry sources.
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In late August, the North African country’s eastern faction closed oil fields, ports and installations amid a row over the leadership of Libya’s central bank, following efforts by the western government in Tripoli to replace central bank governor Siddiq al-Kabir.
The worst shutdown in two years eventually ended on Oct. 3, when Naji Essa, a former adviser to Kabir, was formally appointed as the institution’s new governor.
According to the Platts OPEC Survey from S&P Global Commodity Insights, production fell to 580,000 b/d in September, down from 1.15 million b/d in July. Exports hovered around 465,000 b/d in September, according to data from S&P Global Commodities at Sea.
With the crisis resolved, Libya could now see output exceed the levels recorded before it, according to statements from the NOC, sources and loading programs seen by Commodity Insights.
“With the tireless efforts of workers across various oil production sites, oil and gas production rates have seen a notable increase just days after the lifting of force majeure on oil fields and ports and the resumption of operations,” the state oil firm said on its social media accounts on Oct. 10.
“Oil and condensate production rates have surged by nearly 85,000 barrels over the past two days. On Thursday, daily production reached 1,217,148 barrels, compared to 1,158,862 barrels on Wednesday, and 1,133,133 barrels the day before.”
Condensate production is estimated at around 50,000 b/d.
Output boost ahead
Sources said production had rebounded at the Sarir and Mesla fields to a combined 200,000 b/d on Oct. 10, while Es Sider production was up to 222,000 b/d, a gain of 76,000 b/d since Oct. 6.
One driver for an output boost could be field works, with sources saying companies had likely taken the opportunity to carry out maintenance during the shutdown.
Production at the El-Feel field – operated by Italy’s Eni and the NOC in a joint venture – was at the top of its capacity, just under 90,000 b/d, on Oct. 7, sources familiar with the matter said on condition of anonymity. Maintenance was carried out at the field during the shutdown, although output was high before it, sources said. Eni did not respond to a request for comment.
Maintenance was also ongoing at the Sharara field, Libya’s largest at up to 300,000 b/d. The field was producing around 250,000 b/d prior to the central bank crisis. Spokespeople from Repsol, a stakeholder in Sharara, directed questions to NOC, which could not be reached for comment.
Force majeure was lifted on both the El-Feel and Sharara fields, which lie in western Libya, after Essa’s appointment.
The NOC also said its subsidiaries and IOC partners had successfully drilled five new wells during the first 10 days of October, adding up to 12,000 b/d of crude production. Drilled in the Abu Attifel, Sharara, Nafoura and Sarir fields, the spuds are part of efforts by the state-firm to boost output to compensate for the shutdown and a recent dip in oil prices.
Dated Brent was last assessed at $79.35/b by Platts, a unit of Commodity Insights, on Oct. 10, propped up by escalating tensions in the Middle East. However, the key benchmark almost dipped below $70/b in early September on sluggish Chinese demand, high interest rates around the world, 2025 oversupply fears and high non-OPEC+ production. The price decline led OPEC – of which Libya is a member – to postpone plans to unwind some 2.2 million b/d of output cuts.
Libya is exempt from OPEC quotas due to its ongoing political crisis, but the shutdown helped drag production by OPEC and its Russia-led allies down by 500,000 b/d in September, according to the Platts Survey.
Export uptick
Commodities at Sea data suggests Libyan exports are yet to rebound fully, with October exports currently just 100,000 b/d above September levels at 560,000 b/d. However, an Oct. 10 loading program shared with Commodity Insights shows planned liftings at all of Libya’s key ports in the month.
Vessels have already sailed in October from Mellitah, Es Sider, Marsa El Brega, Ras Lanuf, Zueitina and Marsa Hariga, according to the loading program. A combined nine cargoes are expected to ship from the two key western ports of Mellitah and Zawia in October, the program shows.
A rise in Libyan production and exports would impact other Europe-bound crude grades, as Libyan light sweet oil is popular among refers in the Mediterranean and Northwest Europe, including Azeri Light, Algeria’s Saharan blend and even gasoline-rich crudes from West Africa, such as Nigeria’s Bonny Light.
Differentials for Med-bound crudes strengthened after the Libya outage, but have weakened in recent days. Azeri Light hit a $4.90/b premium to Dated Brent on Sept. 9, according to a Platts assessment, but fell to a $2.20 premium on Oct. 10.
“[The] market is flooded with prompt Libyan. I don’t really know where all this oil can be placed to be honest,” one trader said.
“People are inundated with Libyan cargoes,” said another trader. “They are displacing WTI Midland and Azeri Light.”
While a production rebound is gathering pace, experts say the NOC’s plans to reach 2 million b/d of crude within five years are still optimistic, given the impact that ties between key political actors, including eastern warlord Khalifa Haftar, Prime Minister Abdul Hamid al-Dbeiba and NOC chief Farhat Bengdara can have on oil production.
In the summer of 2022, Haftar’s self-styled Libyan National Army blockaded key oilfields, reducing production and exports to a trickle.
Oil accounts for some 93% of government revenues making the sector and key related institutions such as the oil ministry, NOC and central bank, which distributes oil revenues key political footballs.
The country has seen scant stability since Moammar Qadhafi was toppled in 2011. Since 2014, it has been run by rival governments in Tripoli in the west and Benghazi in the east.