Libya’s Largest Oilfield Halts Production

Sharara, the largest oilfield in Libya, fully halted oil production on Monday after output was curbed during the weekend due to protests, sources with knowledge of the field’s operations told Bloomberg.

Sharara, which has the capacity to pump more than 300,000 barrels per day (bpd) of crude oil, last produced around 270,000 bpd on Saturday.

However, the field began to gradually cut production on Saturday after workers at the oilfield were told to do so, according to Bloomberg’s anonymous sources.

Earlier on Monday, Libya’s internationally recognized government accused its rival government in the east of “political blackmail” following protests that led to operational curbs at the Sharara oilfield.

The statement said the output reduction at the field was extortion but did not elaborate on the claim.

Reuters reported on Saturday that protesters at the field had forced the personnel at the field to begin winding down production, citing two unnamed engineers working at the field.

The Sharara field is a regular target for warring political and military factions in Libya, which boasts the biggest oil reserves in Africa but is having difficulty exploiting them fully due to the complicated political situation in the country.

The latest shutdown at Sharara took place in January this year, again prompted by protesters demanding greater involvement of the government in regional affairs such as job creation and more investments in the regional economy.

Despite the loss of production from Libya, oil prices continued to plunge on Monday amid growing concerns about demand with fears of a recession in the United States.

The market has largely ignored supply concerns in recent weeks as anxiety over the trajectory of global oil demand has intensified. Fears of demand in China amid sluggish economic growth have now spilled over to concerns about the health of the world’s largest economy, the U.S., dragging down oil prices despite reduced supply.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com

• Oil Prices Continue to Tumble as U.S. Recession Fears Mount
• Natural Gas Becomes the Dominant Source of Electricity in the U.S.
• Trump's Trade Policies Threaten to Disrupt Global Energy Markets