Oil prices fell nearly 1% today as investors expected Libya’s oil production to eventually resume following a force majeure declared by the oil exporter on two major oilfields amid a military blockade.
Brent crude LCOc1 was down 56 cents, or nearly 0.9%, at $64.64 per barrel by 07:48 GMT, after rising to its highest in more than a week yesterday.
West Texas Intermediate crude CLc1 was down 35 cents, or 0.6%, at $58.19 a barrel.
“The situation in Libya provided oil prices an early boost but the rally fizzled out as expectations remain that Libya’s oil production will eventually return to normal levels,” Edward Moya, a market analyst with OANDA announced.
Italy’s Eni confirmed that oil production is partially reduced at El Feel oil field after blocking the pipelines.
El Feel, operated by the NOC and Italy’s Eni, produces about 70,000 barrels per day. However, El Sharara operated by the NOC in a joint venture with Spain’s Repsol, France’s Total, Austria’s OMV and Norway’s Equinor, has production of around 300,000 barrels per day.
Libya’s National Oil Corporation declared force majeure on crude loadings from the Sharara and El Feel oilfields, according to a document sent to traders.
The document clarified that individuals under the supervision of the Petroleum Facilities Guard blocked pipelines linking the Sharara oilfield to the Zawiya oil terminal and the El-Feel oilfield to the Mellitah terminal.
Libya will face a “catastrophic situation” unless foreign powers put pressure on Khalifa Haftar to lift a blockade of oilfields that cut output to almost zero, Al-Serraj claimed today.
Fayez al-Serraj clarified that he rejects eastern demands to link a reopening of oil ports to a new distribution of oil revenues among Libyans, emphasizing that such income is -in any case- meant to benefit the entire country.
The Red Crescent team of Tripoli managed to pick up 6 corpses, including twins in Sidra region.
The Red Crescent declared that the body removal crew transferred the bodies to Al-Rahma center, confirming that this voluntary work was carried out in cooperation with the Red Crescent branches in Tahruna, Tripoli and Al-khums, along with all security agencies, according to the organization’s statement on its official Facebook page .
Today, oil prices rose to their highest levels in more than a week, after the reduction of production in El-Sharara and El-Feel Fields.
Brent crude futures rose 70 cents, 1.11%, to 65.55 dollars a barrel, after reaching 66 dollars a barrel earlier, the highest price since January 9.
U.S. Western Texas median crude rose 56 cents, 1%, to 59.10 dollars per barrel, after rising to 59.73 dollars, the highest level since January 10, 2020.
The General Electricity Company of Libya (GECOL) confirmed that it lost more than 300 megawatts of productive capacities produced by the power plants in Zueitina and North Benghazi, after closing the gas fields in the eastern line feeding the two plants.
This comes after two days of the closure of oil ports and the halting of production from oil wells in the eastern parts of the country.
The company explained on Facebook that if gas flows continue to drop, the company will lose production capacities of more than 300 megawatts.
“This would have negative effects on the power grid and would increase hours of load shedding,” the GECOL explained.
Yesterday, World leaders agreed on a final communique at the Libya conference in Berlin chaired by Merkel with the participation of Russia’s President Vladimir Putin, Turkish President Recep Tayyip Erdogan, Egyptian President Abdel-Fattah El-Sisi, French President Emmanuel Macron, Algeria’s new President Abdelmadjid Tebboune, President Denis Sassou Ngueso of the Republic of Congo, British Prime Minister Boris Johnson, Italian Prime Minister Giuseppe Conte, US Secretary of State Mike Pompeo, the head of foreign affairs in the Chinese communist party’s politburo Yang Jiechi, UAE Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan, UN Secretary General Antonio Guterres, UN Special Envoy to Libya Ghassan Salamé, African Union Commission Chairperson Moussa Faki Mahamat, European Parliament President Charles Michel, the head of the EU Commission Ursula von der Leyen, EU foreign policy chief Josep Borell Fontelles and Arab League Secretary-General Ahmed Aboul Gheit.
Among the main points issued in the agreement is to create a new 5+5 Committee shared equally by the internationally recognized government in Tripoli and the pro Khalifa Hafter side.
The conclusions also emphasized that Berlin is a ”process” and that UNSMIL is to follow up and implement its conclusions through an International Follow-up Committee (IFC) made up of representatives of all those that participated in the conference.
The conclusions build upon the Paris, Palermo and Abu Dhabi processes and conclusions as well as the 2015 Skhirat Libyan Political Agreement and all relevant UN and UN Security Council resolutions. This includes UNSMIL’s Gassan Salame current ”Three-Point-Plan” for Libya.
In addition, the document called for the fight against terrorism and illegal migration and the enforcement of the arms embargo – as well as sanctions against those that break the embargo. It called for a permanent ceasefire and a mechanism to monitor it.
It also called for the equal distribution of wealth to remove grievances , the monopoly of the state on the legitimate use of force and the Disarmament, Demobilisation and Reintegration of the Militias.
It also suggested respecting Libya’s sovereign institutions such as the Central Bank of Libya, the Libyan Investment Authority and the National Oil Corporation and for violators of international human rights laws to be held accountable.
In a statement issued today, UNSMIL expresses deep concern over current efforts to disrupt or impair oil production in Libya. This move will have devastating consequences first and foremost for the Libyan people who depend on the free flow of oil for their well-being. It will also have terrible knock-on effects for the country’s already deteriorated economic and financial situation.
The Mission urges all Libyans to exercise maximum restraint while international negotiations continue to broker an end to Libya’s longstanding crisis, including recommending measures to ensure transparency in the allocation of resources. The Mission reiterates the importance of preserving the integrity and neutrality of the National Oil Corporation.
