After opening all fields and ports, Libya confuses OPEC Plus accounts to reduce production

Oil prices fell rapidly at the beginning of weekly trading, Monday, after a Libyan announcement last Friday regarding reaching an agreement to lift "force majeure" from the eastern ports of the country, which were used to export crude.

Today, the Libyan Oil Corporation announced the end of the closure of all Libyan fields and ports after the lifting of the "force majeure" from the Elephant field (south), which paves the way for an increase in the pumping of Libyan oil to the global market after a 9-month interruption.

In early oil trading today, Brent crude for delivery next January lost a dollar and 10 cents, compared with Friday's close, or 2.60%, to reach $ 40.97 a barrel.

Libya's crude production is expected to rise to an average of one million barrels per day within a month, according to the corporation, compared to 100,000 barrels per day since last January, which means confusing the OPEC + (OPEC +) accounts to reduce production.

Last April, the "OPEC Plus" group reached an agreement stipulating in its first phase to reduce production by 9.7 million barrels per day until the end of June. It was extended until the end of last July, and at the beginning of last August, the reduction began to reduce to 7.7 million barrels per day until the end of 2020, and then to 5.8 million barrels per day until the end of April 2022.

Pumping Libyan oil

The injection of Libyan crude comes at a time when the global market is witnessing a contraction in oil demand, with a decline in consumption demand, and the continued weak performance of the aviation sector, with the increasing frequency of infections with the Coronavirus.

The return of Libyan production opens the door for the coalition to reconsider the current or upcoming production cuts in early 2021.

Earlier this month, the International Energy Agency came out with expectations of a contraction of crude demand during 2020, by 8% to 91.8 million barrels per day, down from 100 million barrels in 2019.

And Libya, is exempt from the production cut agreement for reasons related to the decline in its production during the past years since 2013, and the emergency conditions that the Libyan Oil Corporation has lived through from conflicts.

The country will also work hard to increase its production to pre-revolution levels, by the end of 2010, to an average of 1.6 million barrels per day, at a time when it is in dire need of cash to rebuild the country and restore stability to the local economy.