Will Libyan oil compensate for the lack of Russian supplies in Europe?
2022-03-26 08:10:56
Since the 2011 revolution and the fall of the Gaddafi regime, Libya has witnessed chaos resulting from divisions and disputes over power, the rise in the influence of two governments in the east and west, armed groups, and external interventions from Europe, America, Russia, and Turkey.
During the war between Ukraine and Russia, Libyan oil revenues became very sensitive, and the US Special Envoy and Ambassador to Libya Richard Norland emphasized that the management of Libyan oil revenues should remain away from politics and should be built on the basis of transparency and the independence of sovereign institutions in order to keep them away from conflicts political. In the context of the developments of the Ukrainian crisis, Libya can benefit from the current high oil prices and help calm global energy markets, if the National Oil Corporation obtains the necessary resources to boost production.
Since the 2011 revolution and the fall of the Gaddafi regime, Libya has witnessed chaos resulting from divisions and disputes over power, the rise in the influence of two governments in the east and west, armed groups, and external interventions from Europe, America, Russia, and Turkey.
In March 2021, a transitional government headed by Abdel Hamid al-Dabaiba was formed after being sponsored by the United Nations in Geneva, and a mission was set for it to take over the transitional phase within a year until the holding of final presidential and legislative elections in December 2021, but the elections did not take place due to security obstacles between Saif Gaddafi and Haftar.
We find that the Libyan Parliament has taken the seat of the new government in the east in March 2022 headed by Fathi Bashagha, but on the other hand, we find that the Dabaiba government refuses to hand over the institutions in Tripoli because of the lack of elections. Thus, you find Libya entered between two competing authorities and Bashagha formed his government after his alliance with Haftar, who is supported militarily by Moscow.
With the global developments related to the Russian-Ukrainian war, the United States is trying to prevent an armed clash between the two governments, and the attempt to advance Pashaga’s forces to reach Tripoli, and that the existing dispute can be resolved through negotiation and giving each party gains, and the United Nations has been very careful about the political crisis except for Russia, which has openly declared its support for Bashagha. It could use its influence to disrupt Libya's oil production, which is estimated today at 1.2 million barrels per day, causing confusion in the international and European community due to the war in Ukraine, and the oil ports in the east were closed. European countries and the United States are also seeking to increase gas and oil production in the world to avoid a crisis as a result of Russian supplies being cut off due to the war.
The Organization of the Petroleum Exporting Countries (OPEC) confirmed that oil demand in 2022 is facing challenges from the Russian invasion of Ukraine and rising inflation amid the rise in crude prices. Oil sales from Russia have not been witnessed since 2008, and the global demand for oil will rise by 4.15 million barrels per day this year, and it raised its expectations for global demand for its raw materials.
The war in Ukraine and the ongoing fears of the collapse of the global economy will have a negative impact on global growth. There is also a slowdown in economic growth, high inflation, and persistent geopolitical turmoil such as Libya and the conflicts taking place in it, which will affect the demand for oil.
It was found that global oil consumption is 100 million barrels per day. This year, the organization raised its forecast for total oil consumption for the current year by 100,000 barrels per day to 100.90 million barrels per day. Oil prices continued their decline, as they were traded below $99 a barrel, with expectations of a decline in supply risks. It was reported that OPEC production in February rose by 440,000 barrels per day to 28.47 million barrels per day, driven by an increase in supplies from Saudi Arabia, the largest oil exporter, and the recovery from supply interruptions in Libya.
Oil prices also continued their losses by more than 7%, after the cease-fire talks between Russia and Ukraine and concerns about supplies after the United States and Britain banned crude imports from Russia. US West Texas Intermediate crude contracts fell $6.32, or 5.8%, to settle at $103.01 barrel.
The repercussions of the Russian war on Ukraine, which reflected on severe effects in North African countries, and that Libya does not have sufficient reserves to fill the supply gap with the drop in Libyan oil production to less than one million barrels per day, and that Libya is reversing the plan to produce 1.5 million barrels of oil per day in 2022.
Since the 2011 revolution and the fall of the Gaddafi regime, Libya has witnessed chaos resulting from divisions and disputes over power, the rise in the influence of two governments in the east and west, armed groups, and external interventions from Europe, America, Russia, and Turkey.
In March 2021, a transitional government headed by Abdel Hamid al-Dabaiba was formed after being sponsored by the United Nations in Geneva, and a mission was set for it to take over the transitional phase within a year until the holding of final presidential and legislative elections in December 2021, but the elections did not take place due to security obstacles between Saif Gaddafi and Haftar.
We find that the Libyan Parliament has taken the seat of the new government in the east in March 2022 headed by Fathi Bashagha, but on the other hand, we find that the Dabaiba government refuses to hand over the institutions in Tripoli because of the lack of elections. Thus, you find Libya entered between two competing authorities and Bashagha formed his government after his alliance with Haftar, who is supported militarily by Moscow.
With the global developments related to the Russian-Ukrainian war, the United States is trying to prevent an armed clash between the two governments, and the attempt to advance Pashaga’s forces to reach Tripoli, and that the existing dispute can be resolved through negotiation and giving each party gains, and the United Nations has been very careful about the political crisis except for Russia, which has openly declared its support for Bashagha. It could use its influence to disrupt Libya's oil production, which is estimated today at 1.2 million barrels per day, causing confusion in the international and European community due to the war in Ukraine, and the oil ports in the east were closed. European countries and the United States are also seeking to increase gas and oil production in the world to avoid a crisis as a result of Russian supplies being cut off due to the war.
The Organization of the Petroleum Exporting Countries (OPEC) confirmed that oil demand in 2022 is facing challenges from the Russian invasion of Ukraine and rising inflation amid the rise in crude prices. Oil sales from Russia have not been witnessed since 2008, and the global demand for oil will rise by 4.15 million barrels per day this year, and it raised its expectations for global demand for its raw materials.
The war in Ukraine and the ongoing fears of the collapse of the global economy will have a negative impact on global growth. There is also a slowdown in economic growth, high inflation, and persistent geopolitical turmoil such as Libya and the conflicts taking place in it, which will affect the demand for oil.
It was found that global oil consumption is 100 million barrels per day. This year, the organization raised its forecast for total oil consumption for the current year by 100,000 barrels per day to 100.90 million barrels per day. Oil prices continued their decline, as they were traded below $99 a barrel, with expectations of a decline in supply risks. It was reported that OPEC production in February rose by 440,000 barrels per day to 28.47 million barrels per day, driven by an increase in supplies from Saudi Arabia, the largest oil exporter, and the recovery from supply interruptions in Libya.
Oil prices also continued their losses by more than 7%, after the cease-fire talks between Russia and Ukraine and concerns about supplies after the United States and Britain banned crude imports from Russia. US West Texas Intermediate crude contracts fell $6.32, or 5.8%, to settle at $103.01 barrel.
The repercussions of the Russian war on Ukraine, which reflected on severe effects in North African countries, and that Libya does not have sufficient reserves to fill the supply gap with the drop in Libyan oil production to less than one million barrels per day, and that Libya is reversing the plan to produce 1.5 million barrels of oil per day in 2022.
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