As Libya prepares to resume oil exports from the blockaded port of Hariga amid a month-long standoff between rival governments seeking over control of the country’s oil wealth, the global crude glut could suffer another negative jolt.
Libyan oil officials have reportedly told Reuters that an agreement has been reached in Vienna that will allow for a resumption in oil exports from the eastern port of Hariga, where the eastern government and its parallel National Oil Company had blocked shipments for the past month.
In a telephone interview with Bloomberg, an official in Tripoli said shipments from the port would resume within three days.
For now, however, the conflict in Libya is keeping the global oil glut from worsening exponentially. Once a unity government is in place and the rival Tripoli and Benghazi factions, with their rival oil companies, are in agreement, the flood gates will reopen, sending more oil onto the market.
Factions loyal to the eastern government in Tobruk, and the parallel National Oil Company in Benghazi, have been in control of the Hariga port, which is under blockage since the Benghazi NOC unsuccessfully attempted to unilaterally export oil late last month.
Earlier this month, Libyan officials in Tripoli had warned that the country would have to halt the majority of its output from southeastern fields within a month’s time as the Hariga port remained under blockade over an export dispute between rival governments.
Due to the eastern factions’ decision to block shipments, production at the oil fields Messla and Sarir has decreased significantly, dropping to 90,000 barrels a day from 240,000 barrels.
By James Burgess of Oilprice.com