Libya National Oil Corporation has said on Saturday that the country is producing more than 1 million b/d of oil, a 100% increase in just over two weeks, after its two rival-warring factions agreed to a peace deal on Oct. 23.
The North African producer had seen its output fall to less than 100,000 b/d in recent months as an eight-month oil blockade due to conflict temporarily crippled its oil sector.
The sudden increase in Libyan output comes at a very tricky time for the oil market, which is coping with a fragile demand outlook amid a second wave of Covid-19 infections.
The extra supply from Libya means OPEC+ might have some difficulty in trimming its output cuts in 2021 as it had planned to do in its formal meeting on Nov 30 – Dec. 1.
Libya was pumping 1,036,035 b/d on Nov 7, the NOC said, making it the first time in recent months that the state-owned company has publicly divulged an output figure.
NOC has reached the coveted 1 million b/d figure even faster than it had initially expected. On Oct. 23, NOC said Libya output would reach 800,000 b/d in two weeks and it would exceed 1 million b/d within four weeks.
NOC, however, said it may struggle to sustain these production levels if political and financial stability are not maintained.
Meanwhile, the oil corporation is facing huge financial difficulties, including a debt accumulation at many of its subsidiaries, along with a significant delay in the salaries of its employees.
Recall that On Jan. 18, eastern tribes, supported by the Libyan National Army, halted exports from five key oil terminals, which reduced the country's crude production to the lowest since the 2011 civil war.
Libya's oil production had fallen to as low as 70,000 b/d in recent months from around 1.1 million b/d before the blockade in January.
The blockade was only lifted by LNA in mid-September and now all of the country's oil terminal and fields are fully open.
Libya holds Africa's largest proven reserves of oil, and its main light sweet Es Sider and Sharara export crudes are sought after by refineries in the Mediterranean and Northwest Europe for their gasoline and middle distillate yields.