Libya’s Oil

Libya has been in conflict for almost as long as anyone can remember, and it’s just now starting to slow down. Does that mean that their oil production will get back to normal?

Libya is one of the world’s biggest exporters of oil, so the shortages recently have been no surprise. Libya has had political conflict for almost all of recent history, and the latest has shut down the Zuetina oil terminal, a key Libyan provider of crude oil. The company stated that they would resume production, with a “lifting of the force majeure”, which essentially means that they are able to work again.

Earlier in the year, some oil fields were occupied by an armed group, but they were reopened in March. Libya has the 9th largest oil supply of any country in the world, and it has continuously been shut down in different areas due to the conflict. The recent shutdown was due to a group who entered the terminal and forced employees to stop work. Oil prices have been high recently, but the reopened terminal should bring the prices down a little. Prior to the shutdown, the company was making about 1.2 billion barrels of oil. The company has asked for conflict to stop around their oil production in order to keep oil production high.

A Libyan oil facility that previously sold to the U.S. as early as 1973 (The Central Intelligence Agency, Public domain, via Wikimedia Commons)

The Libyan national Oil company stated that they did not know much about the group who invaded the group more recently. The previous one was established to be an armed group, but the most recent one was by a group who the company knows nothing about. The conflict has been increasing recently, and although it has not exactly been peaceful in Libya, there has been much more war in the past, and fears of that coming back are increasing. There are militias that are becoming closer and closer to fighting, and aside from a war, this would also cause a huge decrease in their oil productions. No one wants a war, but the results may be easy to see worldwide if the price of oil saw what would likely be a huge increase.

Libya’s current flag, established after it was changed from a solid green flag (Various  The SVG code is valid. This vector image was created with a text editor., Public domain, via Wikimedia Commons)

The oil reserves in Libya tend to be sought after by revolutionaries and other groups who want to establish a presence as a powerful force in Libya. This results in huge slows in the oil industry much too often. Previously in the country, there was a civil war to get rid of the government established by Muammar Gaddafi. The civil war was horrible for the country, there was constant violence everywhere, and of course its oil industry suffered as well. Oil terminals and refineries were neglected and left alone during the fighting. The civil war just about destroyed the country, and it would be impossible to try and keep the oil industry working. Even if the pipelines and refineries weren’t destroyed in fighting, there hasn’t been even close to enough maintenance to keep them up-and-running. The industry is still partially intact, due to the massive Libyan oil reserve, but production is beginning to come back to life. Formerly, they were only producing about 100,000 barrels of oil a day, but the number is starting to get back up with the other oil giants in nearby areas.