Hellenic shipping, an online daily newspaper said that the implications from Libya’s latest absence from the tanker market are bound to affect rates in this part of the world. While a return to stability appears to still have some way to go, before it’s materialized, recent efforts to restore production and increase exports, could go a long way into improving the market, in this part of the Mediterranean.
According to shipbroker Gibson, “Libya has Africa’s largest proven crude reserves and relies on oil exports for almost all of the state’s revenues. The country’s oil fields, pipelines and terminals have frequently been damaged during the fighting.
Interruptions to oil exports have cost the Libyan treasury billions of dollars. Crude exports from the country reached 36 mln bbls in October last year but plummeted to 1.8 mln bbls during March and April.
The shipbroker added that “this follows several drops in exports in recent years, but none have been as severe and long-lasting as those seen during this year. The resumption of exports from Libya will provide additional volumes into the regional/global market at a time when demand is slowing returning.
However, adding 370k b/d of crude production will significantly benefit the Libyan economy, and if production can remain stable, it will provide increased tanker employment.
Given that the Cross Mediterranean Aframax (TD19) route currently sits at its lowest levels since April 2018, any increase in Libyan export volumes will be welcome news.