Libya is experiencing a significant escalation in oilfield closures, with the Sarir field nearly halting all output due to a political standoff over control of the central bank and oil revenues. Field engineers reported that Sarir, which was producing approximately 209,000 barrels per day (bpd), has seen its operations severely reduced.
On Monday, authorities in eastern Libya, where most of the country’s oilfields are located, announced a complete halt to all production and exports. This follows the declaration of force majeure on exports from the Sharara oilfield, which has a capacity of 300,000 bpd. Reports have also indicated disruptions at other fields, including El Feel, Amal, Nafoora, and Abu Attifel.
In July, Libya, a member of OPEC, was producing around 1.18 million bpd. The current shutdowns are a response to the dismissal of Central Bank of Libya (CBL) chief Sadiq al-Kabir by the Tripoli-based Presidency Council, which has led to mobilization by rival armed factions.
Prime Minister Abdulhamid al-Dbeibah, who leads the Tripoli-based Government of National Unity, emphasized that oilfields should not be shut down for “flimsy pretexts.”
In a diplomatic effort, U.S. Africa Command General Michael Langley and Chargé d’Affaires Jeremy Berndt met with Khalifa Haftar, leader of the Libyan National Army, which controls the eastern and southern regions of the country. The U.S. Embassy in Libya has called for all stakeholders to engage in constructive dialogue, with support from the United Nations.
As a result of these developments, benchmark Brent oil prices have fallen by 1.2% to $78.35 per barrel, as concerns about demand in China and potential economic slowdowns overshadow worries about supply disruptions from Libya.