Libya calls force majeure on exports from Brega port as oil disruption continues

Libya has called force majeure on crude exports from Marsa El Brega on April 19, a day after the National Oil Corp. warned of more closures as protestors stormed oil facilities in the country demanding a change of government.

NOC added Brega to the list of oil facilities currently under force majeure due to the "impossibility of implementing its commitments and treaties towards the oil market", the company said in a statement on its website.

Libya has lost around 400,000 b/d of production due to port closures and field shut-ins prior to the latest declaration, a person familiar with the matter said.

The North African producer is normally a key supplier of light sweet crude streams into the Mediterranean market and the outages are likely to see higher demand for competing grades in the complex such as Azerbaijan's Azeri Light, or Algeria's Saharan Blend. Libyan crude, which is typically light, low in sulfur and yields a good amount of middle distillates and gasoline, is extremely popular among refineries in the Mediterranean and Northwest Europe.

The latest closure comes after Libya shut its biggest oil field, Sharara, and declared force majeure on its Zueitina oil port on April 18 after protestors entered the terminal.

Production was also stopped at Abuatufol, Al-Intisar, Anakhla and Nafura, which produced through Zueitina, NOC said on its website. Zueitina's crude loadings amount to around 90,000 b/d of flows, according to previous NOC statements.

"Despite production averaging 1 million b/d in the first quarter, the situation elicits reminders of the disputed 2014 election after which two rival governments emerged and crude production was capped below 500,000 b/d for nearly two years," S&P Global Commodity Insights said in a research note on April 19.

In its latest statement, NOC called the closures "illegal" at a time of high oil prices.

"The state for realized sales opportunities at prices that may not be repeated for decades to come," the NOC said.

A shutdown of production from the Sirte Oil and Gas Company will impact power in eastern regions due to interruptions in gas supply, the company added.

"Disruption risks also stem from a myriad of well-armed militias, which do not answer to any government and could take advantage of political instability to advance their own interests. Risks are skewed to the downside for our forecast of Libyan crude supply at 1 million b/d in 2022," S&P Global Commodity Insights said.