Energy

Libya reopens oil ports after hurricane and flooding fears

September 12, 2023, 2:06 PM

Pipelines at Libya's Zueitina oil terminal, which was forced to close by Hurricane Daniel — The overall objective of the project, which remains unchanged, is to connect Aphrodite via a subsea pipeline to Egypt

Hurricane Daniel closed ports
No damage to terminal facilities
Race to reopen due to lack of storage

Libya’s four main oil export terminals reopened on Tuesday after being forced to close last week as a result of a hurricane and floods in eastern parts of the country, according to news agencies.

The ports of Brega, Es Sider, Ras Lamuf and Zueitina had been closed since September 9 as a precautionary measure.

Libya’s state-owned National Oil Corporation (NOC) declared a state of maximum alert over the weekend.

The company and its affiliates reduced operations, and ports and shipments were also monitored. But the port facilities of Africa’s third biggest oil exporter have not suffered material damage, the reports said.

Hurricane Daniel, which hit Greece and Turkey in recent days, ravaged Libya’s eastern region. It struck the coastal city of Derna, located about 290 km east of Benghazi, where the storm destroyed two dams, killing at least 2,300 people and leaving more missing.

Libya has the largest oil reserves in Africa and one of the largest in the world. Its eastern province contains the bulk of the country’s oil wealth.

It exports the majority of its oil production and a significant volume of gas to Europe. Libya, along with Algeria and Egypt, will become Italy’s main gas supplier over the next few years, the head of natural resources at Italian energy company Eni told Reuters on Tuesday.

Libya’s production has been lower than its available reserves would imply, as the country has been bogged down in internal conflict for much of the past decade. The bad weather has also impacted production.

NOC said earlier that Libyan crude oil production had reached 1.2 million barrels per day (bpd). Its exports averaged 999,000 bpd of crude exports in the first five months of the year, Argus data showed.

The temporary closure of export ports could have a strong effect on Libya’s oil production, as the country has limited storage capacity.

“If they can’t export, their production would have to stop almost immediately because there’s very little storage now,” energy expert and author Robin Mills told AGBI.

“My expectation would be that it’s a short-term thing.”

Hydrocarbons account for more than 70 percent of the country’s GDP, more than 95 percent of exports and approximately 90 percent of government revenue, according to data intelligence site Trading Economics.

Benchmark oil prices have not changed much in the last week, when they reached $90 a barrel, following the decision by Saudi Arabia and Russia to extend their voluntary output cuts until the end of the year.

Prices were slightly up on September 12, holding above $91 a barrel for Brent crude, while US West Texas Intermediate crude was up to $87.94 at 15:15 UAE time.

On Tuesday Opec announced plans to stick to its forecasts for strong growth in global oil demand in 2023 and 2024.

World oil demand will rise by 2.25 million bpd in 2023, compared to 2.44 million bpd in 2023, Opec said.