Libyan crude exports resume gradual loading from eastern ports

Libyan crude exports have resumed loading from most of the country's eastern ports and some oil fields have received orders to bring back production, according sources and tanker tracking data, as Libya's rival regional governments move closer to a political deal under UN-brokered talks.

Libya's Brega, Es Sider and Marsa El Hariga ports are all open for tankers to berth and load, while the next loading lay time is still pending at Zueitina after the port loaded a crude cargo at the weekend, a well-placed source told S&P Global Commodity Insights.

"An exceptional decision has been made to resume exports at the eastern ports, resulting in an increase in production," the source said. "Ongoing negotiations and meetings between the two sides appear to be progressing positively, contributing to this development."

The 113,000 dwt Pacific Pearl is currently waiting to load a cargo of Es Sider crude at one of Es Sider's offshore loading buoys, according to tanker tracking data from S&P Global Commodities at Sea. The loading would follow two export loadings totaling 1.6 million barrels on Sept. 8, CAS data shows.

The Energy Triumph loaded a 1 million-barrel cargo of Sarir crude from Marsa El Hariga on Sept. 8, due to arrive in Agioi Theodoroi, Greece, on Sept. 11. The Kriti Samaria loaded a cargo of 600,000 barrels of Abu Attifel the same day, with the cargo en route to deliver to Malta later Sept. 10, the data shows.

Libya's Bouri port is also open to shipping but the status of Ras Lanuf "remains unclear," the source said, adding "we expect that vessels will soon enter and berth for loading as usual." Loadings at Libya's western Sharara and Mellitah ports are expected to remain suspended pending "positive news following the latest meetings" the source said.

It is unclear whether crude has resumed flowing to the ports from oil fields or whether the recent loadings are from storage.

Crude differentials

Libyan crude exports collapsed Aug. 26 after the country’s eastern political faction in Benghazi shut down fields in response to efforts by the western government in Tripoli to remove the central bank governor. On Aug. 29, three days into the shutdown, the Libyan National Oil Company said 63% of production had been wiped out, equivalent to 725,000 b/d, according to Commodity Insights estimates.

Total Libyan output fell 160,000 b/d month on month in August to 990,000 b/d due to the row, according to the Platts OPEC Survey.

However, UN-led talks reached a minor breakthrough on Sept. 3, with the two sides agreeing to jointly appoint a new governor within 30 days. Crude prices dipped on the news, amid expectations that the shutdown could start to ease.

The prospect of a prompt restart to exports of Libya's mostly light, sweet crudes has added to the bearish sentiment on crude markets in recent days. Platts, part of S&P Global, assessed Dated Brent at $72.125/b on Sept. 9, a 1.2% fall on the day and taking losses since Aug. 29 to more than $10/b.

But Murban prompt timespreads remained high last week as Libya production disruptions put upside pressure on prices of other regional light grades.

Differentials have surged across the Mediterranean sweet crude complex through the week ended Sept. 6 as prices reacted to the shut-ins across Libya and the confirmation of October maintenance at Kazakhstan's Kashagan oil field.

Light sweet crudes that compete with Libyan grades, such as Azeri Light and Saharan Blend, have seen differentials climb to multi-month highs as the market felt the effect of missing Libyan barrels.

Platts assessed Azeri Light CIF Augusta at a $3.77/b premium to Dated Brent on Sept. 9, the highest since late January. Similarly, Saharan Blend was assessed at a $0.97/b premium to Dated Brent Sept. 5, also a seven-month high.