Oil in Global Economy Series: Militant blockades take 350,000 barrels per day production offline in Libya

Political disruption, led by militant blockade of important pipelines have reportedly reduced Libya’s oil production by as much as 350,000 barrels per day. In July, according to official OPEC report, the production in Libya reached more than more than a million barrels per day. But according to reports, earlier this month, Libya’s largest oil field, ‘Sahara’ was forced to shut down, and two other oilfields, El Feel and Hamada were also forced to shut down last week. Though Bloomberg reported that Hamada oil field, which is the smallest of the three, has resumed production this week, still around 30 percent of the countries’ production remains offline.

The disruption shows, how several oil fields in the Middle East remains vulnerable to terrorist incidents and disruptions and could act as a shock to the oil market as supply and demand balances. In the last three months to July, OPEC production rose by 938,000 barrels per day and Libya contributed almost 48 percent of this increase. According to Libyan central bank, these kind of attacks and protest have cost the country around $160 billion in the direct and indirect loss. Libya’s GDP so far in 2017 remains just fifth of what it was back in 2012, before the civil war.