2018/05/29 – Libya’s oil crescent on Sunday announced a maximum security alert over possible terrorist attacks in vital oil ports and oilfields, as OPEC’s third disruptor—after Iran and Venezuela—threatens to further unsettle today’s turbulent oil market.
The African oil producer faced oil production outages last week, too, as bad weather caused turbines to stop working. Approximately 120,000 bpd was shut in as a result of that outage, at a time when Libya is trying to raise its production above the 1 million bpd mark. Libya has faced a series of what may prove to be insurmountable challenges as protesters, inclement weather, and disputes between factions continue to disrupt its oil production.
Armed guards are now standing by at oil ports, according to the Libyan Express, ready to thwart any terrorist attack that seeks to move into the oil crescent region—Libya’s most prolific oil area.
The security threat—and the possible oil production disruption that may come with it—comes at a precarious time for OPEC, as US sanctions on Iran and Venezuela, along with Venezuela’s already freefalling oil production, rattle the now-tight oil market that fears an overtightening of supplies.
Last week, both Saudi Arabia and Russia committed to increase oil production if needed to compensate for expected losses in Iran post-sanctions, and for continued actual losses in Venezuela as it death spirals to new oil-production lows.
Libya’s recovering oil production has been a swing factor for oil prices since 2016. When it was on the rise, prices fell. Yet there were so many outages as various groups vied for attention and money by blockading pipelines and oilfields, that prices rose on news from Libya pretty much as often as they fell on reports from the North African nation that sports the largest oil reserves on the continent.