Oil firms at 2015 high as Libya output slows

Volatility continues in the oil market as protests in Libya block crude flows to the eastern oil port of Zueitina, sending the brent crude up to $67 per barrel

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Being one of the few Libyan ports still exporting oil, the blockade of Zueitina port lead to a price hike in the global oil market on Tuesday. Protesters closed the pipeline to the port and in return the Brent crude rose to $67 a barrel, just below its 2015 high. Brent touched the highest level of this year with $67.10 on Monday.   

As many other ports and oilfields have closed due to fighting or disruptions since the ousting of former dictator Muammar Gaddafi, Libyan oil output has been declining. According to officials, the production is now below 500,000 barrels per day, a third of what Libya used to pump before 2010.

Although the oil market is abundantly well supplied with member countries of the Organization of the Petroleum Exporting Countries (OPEC) pumping almost 2 million barrels per day more than the current demand for oil, turmoil in the Middle East has kept the market on edge. Due to the civil war in Yemen prices rose, taking risk of disruption to oil supplies into consideration.

As some members battle for the market share, OPEC will meet on June 5 to discuss the production policy.

Strong dollar also affected oil prices, making it more expensive for countries which are using other currencies.

TRTWorld and agencies