Libya’s oil output has fallen by more than half, with approximately 700,000 barrels per day offline as of Thursday, due to a political standoff between rival factions over control of the Central Bank and oil revenues. This crisis threatens to disrupt a four-year period of relative stability in the oil-rich nation.
Several key ports in Libya’s Oil Crescent, including Es Sidra, Brega, Zueitina, and Ras Lanuf, have halted export operations. Engineers reported that four vessels had loaded 600,000 barrels each from the eastern region before the shutdown, but overall production has been severely affected. The Waha Oil Company, a subsidiary of the National Oil Corporation, has seen its output drop from 280,000 barrels per day to just 150,000 bpd, with expectations of further declines.
The ongoing conflict stems from a decision by the Presidency Council, led by Mohammed al-Menfi, to dismiss central bank governor Sadiq al-Kabir, a move rejected by the eastern-based House of Representatives and military commander Khalifa Haftar’s forces. The eastern factions have vowed to keep oil production shut until Kabir is reinstated.
Consulting firm Rapidan Energy Group has estimated that production losses could escalate to between 900,000 and 1 million barrels per day, potentially lasting for several weeks. Historically, oil blockades have been utilized as a political strategy in Libya, and while smaller disruptions are often resolved quickly, major blockades linked to significant political struggles can persist for months.