Bloomberg: Libyan Oil Flows Slide Further as UN Fails to Break Bank Impasse
Summary
Libya's crude exports have sharply decreased due to a standoff over control of the central bank. Exports fell from 468,000 barrels a day at the beginning of the month to 314,000 barrels a day over the past week. The central bank dispute arose after Libya's prime minister replaced the bank governor, leading eastern authorities to halt oil production and exports. Sadiq al-Kabir, who was ousted by political factions, remains in exile and says the bank is cut off from the international financial system, with over 30 international institutions halting transactions. Despite this, the new board appointed by western Libyan factions controls internal systems like salary payments. Kabir hopes to be reinstated through UN-backed talks involving Libya's parliament and High State Council. However, as of Thursday, the UN Libya Mission said rival factions had not reached a final agreement. Meanwhile, oil output has dropped by more than half to 450,000 barrels per day, down from over 1 million, although limited exports continue.
Libya’s oil exports declined by about 800 kb/d then recovered where the loss was 600 kb/d last week, according to data from Kpler, as shown in Figure (1). The impact of field closure on world oil markets is larger than in the past as we explain below. In a recent X Spaces discussion we mentioned the real reason for the dispute of the Central Bank that was not covered by anyone accept us. Details below.
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EOA’s Main Takeaways
The unusual quick response from the Biden Administration and the United Nations proves our point that what is reported in the media is a veneer covering a major issue that no one wants to talk about. We believe it is over the $70 billion sovereign wealth fund that the UN might unfreeze at any time. The assets have been frozen since 2011. However, the Biden administration does not want to see an increase in oil prices before the election and is doing everything it can to maintain the flow of Iranian, Russian, and Venezuelan crude.
The impact on the global oil market is not only the loss of quantity, but also extends to crude quality and the heavy concertation of exports in a few countries.
The impact of the current decline in exports is larger than the previous blockade simply because the substitutes that existed during the previous cut off from the US and Nigeria does not exist today. Also, demand was declining significantly during the previous blockade. That is not the case today.
European countries will be impacted the most, especially Italy. Figure (2) shows Libya’s crude exports by destination. Data from Kpler shows that about 72% of Libyan crude exports go to Europe. One-third of Libyan exports go to Italy.
The recent wave of bearish sentiment in the oil market appears to ignore the impact of Libya’s cut off. But the impact of the decline in exports is large in terms of quantity and quality and will start showing up in the market soon, especially that crude exports from non-OPEC+ members such as the Brazil, Norway, and the US have been declining.
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Story of the Day
EIA: US Crude Oil Exports Are Declining
Which countries don't/didn't have a money printing central bank controlled by the cabal?
What does central banks do to countries and the countries citizens?
Was Kaddafi all bad? What good was he doing for Africa?
Who took him out and do you trust those who did?
The unusual quick response from the Biden Administration and the United Nations proves our point that what is reported in the media is a veneer covering a major issue that no one wants to talk about. We believe it is over the $70 billion sovereign wealth fund that the UN might unfreeze at any time. The assets have been frozen since 2011. However, the Biden administration does not want to see an increase in oil prices before the election and is doing everything it can to maintain the flow of Iranian, Russian, and Venezuelan crude. Does that cause global inflation? Does inflation hurt all but the central banks?
Bloomberg: Libyan Oil Flows Slide Further as UN Fails to Break Bank Impasse Summary Libya's crude exports have sharply decreased due to a standoff over control of the central bank. Exports fell from 468,000 barrels a day at the beginning of the month to 314,000 barrels a day over the past week. The central bank dispute arose after Libya's prime minister replaced the bank governor, leading eastern authorities to halt oil production and exports. Sadiq al-Kabir, who was ousted by political factions, remains in exile and says the bank is cut off from the international financial system, with over 30 international institutions halting transactions. Despite this, the new board appointed by western Libyan factions controls internal systems like salary payments. Kabir hopes to be reinstated through UN-backed talks involving Libya's parliament and High State Council. However, as of Thursday, the UN Libya Mission said rival factions had not reached a final agreement. Meanwhile, oil output has dropped by more than half to 450,000 barrels per day, down from over 1 million, although limited exports continue.
Libya’s oil exports declined by about 800 kb/d then recovered where the loss was 600 kb/d last week, according to data from Kpler, as shown in Figure (1). The impact of field closure on world oil markets is larger than in the past as we explain below. In a recent X Spaces discussion we mentioned the real reason for the dispute of the Central Bank that was not covered by anyone accept us. Details below.
Upgrade to paid EOA’s Main Takeaways
Share Story of the Day EIA: US Crude Oil Exports Are Declining
Which countries don't/didn't have a money printing central bank controlled by the cabal? What does central banks do to countries and the countries citizens? Was Kaddafi all bad? What good was he doing for Africa? Who took him out and do you trust those who did? The unusual quick response from the Biden Administration and the United Nations proves our point that what is reported in the media is a veneer covering a major issue that no one wants to talk about. We believe it is over the $70 billion sovereign wealth fund that the UN might unfreeze at any time. The assets have been frozen since 2011. However, the Biden administration does not want to see an increase in oil prices before the election and is doing everything it can to maintain the flow of Iranian, Russian, and Venezuelan crude. Does that cause global inflation? Does inflation hurt all but the central banks?