On Thursday, Libya’s oil output was significantly reduced, with over half of the production, around 700,000 barrels per day, being shut down, and exports were suspended at several key ports.
This situation arose from a political deadlock between competing factions over the control of the central bank and oil revenue, threatening to disrupt a four-year period of relative stability.
The conflict over the Central Bank of Libya could lead to renewed instability in the country, which remains divided between eastern and western groups.
Ports in the oil-rich Oil Crescent region, including Es Sidra, Brega, Zueitina, and Ras Lanuf, ceased export operations on Thursday. Earlier, four vessels, each carrying 600,000 barrels of oil, left the eastern ports of Es Sidra, Brega, and Zueitina.
Output Reductions
Production at oilfields operated by Waha Oil Company has decreased from 280,000 to 150,000 barrels per day and is expected to decline further. Additionally, output has been halted or reduced at the Sharara, Sarir, Abu Attifel, Amal, and Nafoora fields, leading to an overall reduction of about 700,000 barrels per day.
Libya’s production was around 1.18 million barrels per day in July. Estimates suggest that production losses could range from 900,000 to 1 million barrels per day and may continue for several weeks.
Regional Rivalry
Eastern factions have vowed to keep oil production halted until the Presidency Council and Government of National Unity in Tripoli restore Sadiq al-Kabir as central bank governor.
The Council, led by Mohammed al-Menfi, announced on August 18 that Kabir was being removed, a decision contested by the eastern House of Representatives and Khalifa Haftar’s forces.
Libya has experienced ongoing instability since the 2011 ousting of Muammar Gaddafi, with the east-west factional split originating in 2014. Oil blockades have frequently been used as a political tool during this unrest.
Extended Blockades
While smaller, localized production disruptions can often be resolved quickly, larger blockades tied to major political or military conflicts can last for extended periods.
The longest significant blockade occurred in 2020 when production was nearly completely halted for eight months by forces under Khalifa Haftar, ending only as part of a broader settlement after his offensive against Tripoli failed.