Haftar and the Libya National Army have declared that NOC East is now the body responsible for handling the export of the crude through five key ports – Ras Lanuf, Es Sider, Zuetina, Hariga, and Brega. Buying Libyan crude from a company other than NOC violates a 2014 UN Security Council Resolution. As a result, exports from these ports have stopped and production is shutting in. NOC confirmed that 850,000 b/d of production will come offline, bringing Libya’s crude production down toward 150,000 b/d. It’s early to say, but we estimate this disruption will last three to six weeks.
Libya’s crude production should remain near 1 million b/d for the next several months. The likelihood of production-disrupting violence, however, will increase significantly in the run-up to the December 2018 election. Production could fall by up to 200,000 b/d as a result. Europe’s refiners would look elsewhere for light sweet crude, including the U.S.
Libya will not solve its own problems in 2017. And although international actors, including the US and Russia, have military presence in the country, their influence will not the tip scales toward national resolution or in favor of any faction. Continued violence and the undermining of the National Oil Company will keep oil production fluctuating between 400,000 b/d and 800,000 b/d for the foreseeable future.