Daily Energy Report
Libya’s possible oil export disruption, adding more oil producers to OPEC+, Saudi's bullish view of the oil market, Iran’s continued threats to oil tankers, and more
CHART OF THE DAY: The impact of Libya’s possible blockade
Figure (1) above shows Libya’s crude oil exports which currently stand at around 1.1 MMB/D. It also shows the impact of the blockade that took place in 2020 when the world lost about 1 MMB/D.
EOA’s Main Takeaway:
General Khalifa Haftar, who is in control of Eastern Libya, threatened to use military force if a "fair" distribution of revenues is not agreed on by the end of August. People understood this as a blockade of crude exports similar to that that took place in early 2020.
As we stated in our EOA Weekly Newsletter, markets have been shrugging off Libya's volatile oil supplies. The impact will be mostly limited to certain countries and to price differentials. However, the Libyan oil minister, Mohamed Oun, stated that Khalifa Hafter's proposal will not work because it is "very difficult to implement." While the possibility of another blockade remains low at this moment, the impact of a blockade now is limited, such statements show how tense the situation is.
STORY OF THE DAY: Will bigger OPEC+ help?
Three OPEC+ ministers agreed that a bigger OPEC is better. The statements were made in Vienna today. A large group of OPEC ministers, officials, industry leaders, and analysts are meeting in Vienna today and tomorrow for what is known as “The OPEC Seminar,” which is held every two years.
Their quotes are listed below as reported by Argus:
UAE's energy minister Suhail al-Mazrouei: "Imagine if we are 60pc of the producers or 70pc of the producers [of the world]," ..." Imagine… we would do a better job."
Equatorial Guinea's Minister of Mines and Hydrocarbons Antonio Oburu Ondo: "The bigger [Opec] is the better it is and it just creates market certainty." "If we are larger, we can impact better on transparency and also with the certainty of data."
Azerbaijan's energy minister Parviz Shahbazov: "We need to expand beyond the realm of oil and into the energy sector as a whole because we are in a transitional time. We have to act widely."
EOA’s Main Takeaway:
This is not a practical idea: