What’s Next for Libya’s Oil Surge as Warring Rivals Talk Peace - Bloomberg

What’s Next for Libya’s Oil Surge as Warring Rivals Talk Peace - Bloomberg

After years of setbacks and false starts, Libya is back in the oil game. A stalemate between the armed forces battling to control the OPEC nation has led to an uneasy truce, and most fields and ports shuttered amid the fighting are operating once again.

A blockade of many of the country’s energy facilities ended last month, and the state energy firm National Oil Corp. is ramping up production faster than many analysts expected. Output has surpassed half a million barrels a day for the first time since January. Libya’s biggest field, Sharara, has resumed pumping, and seven of its nine export terminals are now open for tankers to load oil. If the truce sticks, production could reach 1 million barrels a day by March, according to JPMorgan Chase & Co.

Whether Libya can sustain and build on the recovery is an open question. The country is still a long way from pumping the 1.2 million barrels a day it supplied prior to the January blockade -- not to mention the 1.8 million that flowed before the 2011 uprising that toppled strongman Moammar Al Qaddafi and triggered almost a decade of strife and lost production.

Repeated efforts to broker a lasting peace between Fayez al-Sarraj’s United Nations-recognized government based in Tripoli and eastern commander Khalifa Haftar have faltered. But on Wednesday, the rivals extended their truce, providing a rare sense of stability for one of the world’s most war-ravaged oil producers.