Libyan output has been deeply disrupted by the civil war over the past months and the country’s largest field, the Sharara field, has been shut-off after resuming production on Sunday.
There had been news that it will slowly begin resuming production following a brokered deal between rival factions, but it will take months for the field to return to full capacity.
Meanwhile, Reuters reported that the European Union’s top diplomat has urged all conflict parties in Libya to immediately stop all military operations and engage constructively in peace negotiations.
In a joint statement with the foreign ministers of Germany, France and Italy issued on Tuesday, the EU’s Josep Borrell called on the conflict parties in Libya to swiftly agree on a ceasefire and withdraw all foreign forces, mercenaries and military equipment.
France, Germany and Italy have urged all Libyan and international parties to immediately stop all military operations in Libya, which arrived in a joint statement today.
Key notes
- EU, France, Germany and Italy urge all conflict parties in Libya to engage constructively in negotiations – joint statement.
- EU, France, Germany and Italy urge conflict parties in Libya to swiftly agree on a ceasefire, withdraw all foreign forces, mercenaries and military equipment – joint statement.
Market implications
Libya holds Africa’s largest crude reserves. However, a very long nine-years of conflict since the 2011 ouster of ruler Muammar Gaddafi have hobbled production and exports.
El-Sharara oilfield produces more than 300,000 barrels of crude oil per day, forming roughly one-third of the oil-rich country’s production. Libya’s return will eventually bring more barrels on the market.
Meanwhile, as energy markets look on the horizon, a major concern is the resumption of production growth in the US shale patch, as prices sharply recover closer towards break-even levels.
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