Ahead of the long-awaited Presidential elections scheduled for December 24, Libya’s largest oil field has been closed after militias shutdown one of the pipelines.
A paramilitary force, the Petroleum Facilities Guard (PFG) tasked with the protection of the country’s energy facilities, closed a valve on a pipeline taking crude from El-Sharara field to Zawiya port. It is unclear how long it will take to reopen the valve and the field.
Workers are still able to load oil in storage tankers in Zawiya, a city 47km west of Tripoli. At full capacity, El-Sharara pumps around 300,000 barrels per day , and its closure may lower Libya’s overall daily output to below one million barrels. Any sustained fall in supply from Libya, which sits on Africa’s biggest oil reserves, could counter OPEC’s efforts to boost production.
Oil prices have rallied about 35% this year, as economies recover from the worst of the COVID-19 pandemic. The spread of the Omicron variant has impacted the prices, with Brent crude dropping 5% on Monday morning in London, to less than $70 a barrel.
Libya’s daily output was roughly 1.2 million barrels in November, the government is trying to attract billions of dollars of investment from foreign energy companies, including France’s Total Energies SE and Italy’s Eni SpA, in a bid to raise exports to 2 million bpd within six years.
Libya is set to hold national elections later this week, which is seen as crucial to ending its long-running civil war, but deep political divisions threaten to provoke a delay or renew violence.
Western officials have talked up a UN-led peace process, insisting on “inclusive” and “credible” elections on December 24, in spite of serious disputes over the conduct of the polls.