Libya’s oil output falls short of expectations

The 12 days air war between Israel and Iran momentarily raised hopes for a miraculous rise in oil revenues.

However, the very short-term effect of the conflict on oil prices has brought Libya’s energy sector back to reality, with over-spending and stagnant production rates bringing enormous pressures to the Libyan state.

Although efforts are ongoing to resume work at abandoned wells and maintain current infrastructure, the current pace of developments does not point to future success and the accomplishment of the NOC’s production targets over the next few years.

A closer look

Libya would have been one of the few OPEC members to greatly benefit from any major disruption in maritime transit around the Strait of Hormuz, with the head of Libya’s General Union of Oil Workers Salem al-Rumaih saying crude at $100 per barrel would significantly boost Libyan oil revenues.

However, crude oil prices quickly went back to the $60s channel while concerns about Libya’s financial health remain. The NOC’s production data continue to show either stagnant or slightly dropping oil output which remains below previously reported levels of 1.4 million barrels per day.

In fact, production has been around 1.37 million barrels per day according to the NOC. This situation may however be due to faulty reporting, with the NOC likely having published high production levels in end 2024 without such data being representative of actual output levels.

Instead of dropping output levels, secondary sources show that production is slightly increasing in Libya, from 1.27 million bpd in March to 1.3 million bpd in May.