Tripoli: Libya boosted oil production to a milestone of more than 1 million barrels a day, after civil war all but shut down the North African country's energy industry at the start of the year.
The OPEC member, which holds Africa's largest crude reserves, has been ramping up production since a truce took hold last month between rival military forces. It was pumping 800,000 barrels a day last week, and the state-run National Oil Corp. reported on its website Saturday that output now exceeds the million-barrel level - the most since December.
Libya produced less than 100,000 barrels a day in early September. Its resurgence has taken oil traders by surprise and puts pressure on crude prices just as renewed coronavirus lockdowns in Europe stifle energy use. Benchmark Brent crude has slumped 40% this year and ended the week at $39.45 a barrel.
The NOC said it "might not be able to preserve these current levels of production, and they might decrease or stop completely in light of some entities' foot-dragging and obstruction of the efforts of the corporation to increase production." The company is short of cash to repair its dilapidated oil facilities, and the virus-induced slide in crude prices is a major hurdle.
Even so, the extra Libyan barrels flooding the market are an unwelcome complication for OPEC+, a coalition of the Organization of Petroleum Exporting Countries and other producers such as Russia. The group was set to increase production by almost 2 million barrels a day in January - part of a plan to ease cuts that began in May. But it may be forced into a delay with the pandemic and a feeble demand recovery keeping crude prices in check.
Libya targets producing 1.3 million barrels a day by the beginning of 2021, NOC Chairman Mustafa Sanalla said in an Oct. 31 interview. Although its strife exempted it from supply cuts, the Arab nation will coordinate with other OPEC+ members, Sanalla said.
Libya's oil industry was mostly shuttered in mid-January when Khalifa Haftar, a Russian-backed commander based in the east of the country, blockaded ports and fields. Haftar, who was battling the United Nations-recognized government of Prime Minister Fayez al-Sarraj, lifted his blockade around six weeks ago after winding down hostilities in June. The two sides signed a permanent cease-fire agreement last month.