Libyan crude oil production close to the new normal.

Catogory : Market Report

Libya was one of the most watched producing countries in 2017, as reviving production meant it was considered one of the countries most likely to undermine industry-wide efforts to tackle bloated inventory levels. However, when it signed up on 30 November to the accord to extend the OPEC-led production cut deal to the end of 2018, it agreed to cap production at 1M b/d, instantaneously removing itself as a candidate for the 2018 most-watched list. Instead, following further militant action to disrupt production in December, the primary question that will follow Libya in 2018 is whether it can sustain production at its new target level.

The strength of the recovery in Libyan crude oil production as measured by the revival in exports last year. By Q4 2017, exports averaged close to 0.8M b/d, up from 0.45M b/d in Q4 2016 – although still well down on 2012 when exports averaged 1.3M b/d. We estimate that exports were equivalent to 81% of production in 2017.

Libyan crude oil export terminals are spread along its entire Mediterranean coastline. Around 40% of exports in 2017 were shipped through the western ports of Az Zawiya (28%) and Zuwarah (12%), while 20% went through the eastern port of Marsa el-Hariga. Adjabiya (12%), situated centrally along the coastline, was the next most important export port. A further seven ports provided the remaining 29% of liftings.