LONDON (AP) — A tanker is headed for Libya’s rebel-held port of Marsa el-Hariga on Tuesday to load up a shipment of oil for export, the first in almost three weeks amid escalating violence, according to shipping data provider Lloyd’s Intelligence.
The delivery would be only a tiny fraction of Libya’s pre-crisis exports of around 1.6 million barrels a day, but is viewed by analysts as a symbolic step forward.
“The significance is not only that this is the first shipment in 18 days, but also a signal that Libya is open to international trade and shipping,” said Michelle Wiese Bockmann, Lloyd’s List markets editor.
London-based Lloyd’s said the Equator tanker, capable of carrying around 1 million barrels of crude oil, is currently off Port Said in Egypt and expected to arrive at the Libyan port later in the day.
The conflict in Libya caused crude exports from the country, 17th among the world oil producers, to dwindle to a trickle, sparking a surge in global oil prices. Benchmark crude was trading at around $108 a barrel on Tuesday.
Bockmann said Lloyd’s believed the shipment would be taken to Qatar for marketing – possibly to Italy and France. Qatar last week offered to market oil from the port.
The tanker, a Suezmax built in 1996, is owned by Athens-based Dynacom Tankers. An official at the company, who declined to give his name, said the company “did not yet know” whether the Equator would dock in Libya. He refused to provide details on what stage the negotiations were currently at.
The rebel-controlled Arabian Gulf Oil Co., or Agoco, said a month ago that it expected a tanker at Marsa el-Hariga, near the city of Tobruk, in mid-April.
Agoco has said it has around 3 million barrels of usable oil stored at the port and that opposition-controlled fields in the eastern part of the Sirte Basin – connected to the port via pipeline – are producing at a rate of 100,000-120,000 barrels per day. That’s down from 400,000 barrels per day before the crisis.
However, Samuel Ciszuk, IHS Global Insight’s senior Middle East energy analyst, warned about the likelihood of fighting spreading to the eastern oil areas.
“Given the organisational, logistical and firepower superiority on the battlefield of the regime’s forces, it would be highly surprising if they did not move in to try to disrupt oil flows to Marsa El-Harigh, perhaps by striking at the long pipeline connecting the Sirte Basin to the port,” Ciszuk said in a note to clients.
“While neither side initially would want to risk destroying upstream structures and risking damaging reservoirs, potentially irreversibly, the risk for the escalation of violence is obvious and this could … be a harbinger of long-term damage and disruptions making a recovery for the Libyan oil industry a steep uphill climb,” he added.
Ciszuk also dismissed reports from Agoco that production from the Sirte Basin could quickly be increased via the recruitment of Arab oil engineers, mainly Egyptians, to make up for a shortage of Libyans, as “very over-optimistic.”
—
Derek Gatopoulos in Athens contributed to this report.
