Oil prices gain 1% with Libya shutdown

By Ovunc Kutlu

ANKARA (AA) - Crude oil prices were up by more than 1% during early trading on Monday with the halt in output and exports from oil-rich Libya with the escalation of civil conflict.

The El Sharara oil terminal in Libya was seized over the weekend by groups loyal to Libyan warlord Khalifa Haftar, cutting it off from the country's northwestern port of Zawiya -- a key port for oil exports.

Libya's National Oil Corporation (NOC) declared a force majeure on Saturday, and said the halting oil exports would result in the loss of crude oil production of 800,000 barrels per day (bpd) and financial losses of approximately $55 million a day.

“The oil and gas sector is the lifeblood of the Libyan economy and the single source of income for the Libyan people ... They are not cards to be played to solve political matters," NOC Chairman Mustafa Sanalla said in a statement.

Libya holds Africa’s largest crude reserves, but nine years of conflict and violence in the country since the 2011 ouster of ruler Muammar Gaddafi have hurt production and exports.

The country produced 1.14 million bpd of crude oil in December 2019 based on secondary sources, according to OPEC's Monthly Oil Market Report for January.

The price of Brent crude gained 1.34% on Sunday to reach as high as $66 per barrel. The international benchmark was trading at $65.62 a barrel at 0644 GMT on Monday.

American benchmark West Texas Intermediate increased 1.25% on Sunday to climb as high as $59.66 a barrel and on Monday at 0644 GMT was trading at $59.19 a barrel.