The U.N.-backed Libyan energy company lifts the suspension of oil loading at key export terminals. The outage added a premium to the price of oil in recent weeks. Photo by Steve Allen/Shutterstock
July 11 (UPI) -- Libyan oil production could return to normal levels in short order after the suspension of oil loading at four ports was lifted, the national oil company said.
The U.N.-backed National Oil Corp. said Wednesday it lifted force majeure at four ports shut down after disputes over control.
"The facilities were handed over to the corporation this morning," a company statement read. "Production and export operations will return to normal levels within the next few hours."
The NOC suspended its contractual obligations for loading at oil ports last week. Called force majeure, the suspension followed port blockades imposed by the Libyan National Army in violation of U.N. Security Council resolutions giving the NOC control.
Storage tanks at the Ras Lanuf oil port suffered catastrophic damage after militants stormed the facility in June. Reconstruction efforts could take several years, especially considering the tense security situation in the country.
The company said the loss to daily production was about 850,000 barrels of oil, about 80 percent of the country's pre-conflict production this year. Energy market data company Genscape estimated production was closer to 508,000 bpd, noting reporting on Libyan production has been highly volatile.
Production woes in Libya that emerged in June added a premium to the price of oil moving through a market with little extra capacity to buffer against supply-side shocks. The price for Brent crude oil, the global benchmark for the price of oil, was down more than 2 percent before the start of U.S. trading on Wednesday.
Mustafa Sanalla, the head of the NOC, said last week the blockades were costing the country about $67 million per day because of the loss of oil production. On Wednesday, he added that Libyan leaders needed to ensure all of the nation's citizens were able to realize support from the nation's oil serves.
"We need a proper national debate on the fair distribution of oil revenues," he said. "It is at the heart of the recent crisis."
The return to production followed Monday's visit to Tripoli by European Parliament President Antonio Tajani. The president said his visit was meant to express support for a country still working on unity nearly seven years after former leader Moammar Gadhafi died at the hand of rebels during civil war in 2011.
"Stability in Libya means stability in Europe," he said.