Libyan oil shipments are poised to hit the highest in at least three years in the latest sign the North African country is managing to sustain a production revival.
Exports are on course to reach about 715,000 barrels a day this month, the most since July 2014, when Bloomberg began monitoring Libyan shipments, tanker-tracking data show. With relatively limited capacity to process that crude in its domestic refineries, the shipments have been moving in lock-step with production.
Libya’s surging output is a key factor helping to undermine the Organization of Petroleum Exporting Countries’ efforts to reduce global supply and increase oil prices. The group met last week in Vienna to discuss how to deal with rising production in Libya and Nigeria — both OPEC nations exempt from supply curbs — rather than deepening output cuts by other members. U.S. production climbing to the highest since August 2015 has further derailed OPEC’s efforts.
Exports from Libya are recovering with Sharara, the country’s largest oil field, resuming output, as well as the fields operated by Wintershall AG. The country was pumping 902,000 barrels a day as of June 20, according to the state National Oil Corp. It would be the highest level since June 2013.
The NOC and Germany-based Wintershall agreed earlier this month to restart production in some areas, allowing for crude to flow again from the Agkhara deposit. The deal also allowed Libya’s Sarah oil field to resume output, according to a person familiar with the situation. Sharara was pumping 270,000 barrels a day as of the start of last week.
So far this month, 30 cargoes comprising 25 Aframax-class tankers and five Suezmaxes have loaded from Libyan ports, totaling 20.03 million barrels, according to Bloomberg estimates. An additional five tankers are set to load in the coming days.
Italy is the most popular destination for Libyan barrels, accounting for 10 of June’s shipments. A further six headed to Spain, and two cargoes each were shipped to France, Greece, the U.K. and the U.S.