Libya oil output hits new 12-year high as Tripoli tensions flare

Libyan oil output edged up to a new 12-year high of 1.23 million b/d in May, the Platts OPEC+ Survey from S&P Global Commodity Insights showed June 10, in spite of simmering political tensions and the worst bout of fighting in years in the capital Tripoli.

May's crude output rose 30,000 b/d month over month, the survey found, as the fractured North African country continued its impressive recovery from a weeks-long oilfield and port shutdown in late 2024 -- related to a power struggle at Libya's Central Bank -- which cut output by half.

It is the highest monthly total since May 2013 -- less than two years after the overthrow of Moammar Qadhafi plunged the OPEC member into chaos -- and follows the return of international oil companies to Libya's oil sector, workovers and upgrades at mature fields and resumptions at oil fields such as Mabruk, which came back online at 5,000 b/d in March after a 10-year hiatus.

Libya relies on its oil and gas sector for some 93% of government spending, according to analysts. But fields, ports and other infrastructure sit under the control of rival political factions in the west and east and have been frequently targeted by political actors, protesters and armed groups in recent years.

Increased output in May was reflected in Libya's crude exports, which hit a multi-year high of 1.26 million b/d, according to data from S&P Global Commodities at Sea. Italy was the biggest purchaser of Libya's light sweet crudes in the month, followed by France, the US and China.

Almost all of Libya's crude is exported due to the shoddy state of its domestic refineries. Commodity Insights analysts put Libyan refinery runs at roughly 90,000 b/d, mainly from the Zawiya refinery.

Until recently a bartering system saw Libyan crude swapped with imported refined products, but that came to an end in March. Today, payment issues have caused bottlenecks at Libyan ports, according to sources, raising the prospect of fuel shortages and civil unrest.

Political instability

The impressive production boost in May comes despite rising political instability in Tripoli, following the reported assassination of influential militia leader Abdul Ghani al-Kiklii, known as Gheniwa, on May 12, which analysts say created a security vacuum in the west of the country.

On May 28, the National Oil Corp. denied that its headquarters in Tripoli had been stormed by gunmen, saying that instead a "limited personal dispute" had occurred in the reception area.

Nevertheless, the eastern faction -- dominated by warlord Khalifa Haftar -- threatened to declare force majeure again on oil fields and ports due to "repeated attacks" on institutions, as well as to relocate the NOC HQ to a "safe city" in the east.

Thus far, the rising tensions have not affected oil production or facilities, sources in Tripoli told Platts.

Libya is currently holding its first bid round since the fall of Qadhafi and is aiming to boost output to 2 million b/d by 2028.

Platts, part of Commodity Insights, last assessed the flagship Es Sider crude grade at a 45 cents/b discount to the Dated Brent benchmark on June 9.