Oil Production Threatened as Libya's Political Turmoil Deepens

The situation in Libya has deteriorated over the past two months and it could get worse still unless the warring factions manage to agree on a unified government. This is according to the UN’s special envoy for Libya, Stephanie Khoury, who spoke at the Security Council this week.

“Unilateral acts by Libyan political, military and security actors have increased tension, further entrenched institutional and political divisions, and complicated efforts for a negotiated political solution,” the official said, as quoted by the Daily Mail.

The tension that the UN envoy mentioned recently led to yet another declaration of force majeure at Libya’s largest oil field, Sharara. The field has a capacity of producing up to 300,000 barrels of crude daily but production was suspended amid protests of locals against the economic crisis in the country.

The government that the West recognizes blamed its rival government in Eastern Libya for the protests, calling them a blackmail.

“In the absence of renewed political talks leading to a unified government and elections you see where this is heading - greater financial and security instability, entrenched political and territorial divisions, and greater domestic and regional instability,” Khoury also told the Security Council.

The political situation in the country is making its plans to boost its crude oil production rather challenging. Those plans, as detailed by the national Oil Corporation, envisage raising the daily total from around 1 million barrels to 1.5 million barrels in 2025, ramping this up further to 2 million barrels over the two years to 2027.

Unless the infighting continues and the economic situation of the locals does not change for the better, chances are that the chaos will continue, with Libya’s biggest export revenue earner under constant threat of outages as various groups see the oil fields as a bargaining chip in disputes with government entities or other groups.

By Charles Kennedy for Oilprice.com

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