(Bloomberg) -- Libya’s oil production has been hit after militias caused a shutdown of the OPEC member’s biggest field days before an election.
Members of the Petroleum Facilities Guard, a paramilitary force meant to protect the country’s energy facilities, closed a valve on a pipeline taking crude from Sharara to Zawiya port, a person familiar with the matter said. It is unclear how long it will take to reopen the valve and the field.
Zawiya, near the capital of Tripoli, is still operating and workers can load oil in storage onto tankers, said the person.
Sharara pumps around 300,000 barrels a day at full capacity and its closure may have lowered Libya’s overall daily output below 1 million barrels. Any sustained fall in supply from Libya, which sits on Africa’s biggest oil reserves, could counter efforts by the Organization of Petroleum Exporting Countries and its partners to boost production.
Oil prices have rallied about 35% this year as economies recover from the worst of the coronavirus pandemic. Still, the spread of the omicron variant has weighed on the market, with Brent crude dropping 5% on Monday morning in London to less than $70 a barrel.
Libya’s daily output was roughly 1.2 million barrels in November, according to data compiled by Bloomberg. The government is trying to attract billions of dollars of investment from foreign energy companies, including France’s TotalEnergies SE and Italy’s Eni SpA, in a bid to raise exports to 2 million barrels per day within six years.
The Sharara shutdown comes ahead of a presidential election scheduled for Dec. 24 that’s meant to end more than a decade of conflict and civil war. There are doubts the vote will go ahead, as disputes over the eligibility of candidates threaten to sow fresh turmoil.
EXPLAINER: How Election Will Test War-Torn Libya’s Fragile Unity: QuickTake
(Updates with more detail from second paragraph.)
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