OIL PRODUCTION RESUMES IN LIBYA AS POLITICAL STANDSTILL ENDS

Oil production in Libya will resume on Thursday, the country's oil minister, Khalifa Abdul Sadiq, said in an interview with Bloomberg today, after a pause of more than a month caused by a political stalemate between the eastern and western administrations of the North African OPEC member.

The end of the Libyan crisis will see the return of several hundred thousand barrels of crude oil a day to a market currently fearing a supply shock from a Middle East on the brink of all-out war.

Oil production at most of Libya’s oil fields has been suspended for more than a month after the country’s eastern and western administrations clashed over who should govern Libya’s Central Bank.

Late last week, the warring factions reached an agreement in U.N.-brokered talks on the Central Bank leadership election, paving the way for the restoration of oil production and exports.

These numbers have dropped dramatically in the last month.

Stephanie Khoury, acting head of the United Nations Support Mission in Libya (UNSMIL), said last week, commenting on the agreement,

“I also want to stress the urgent need to end the closure of oil fields and disruptions in oil production and exports. “I highly appreciate the commitment made by the authorities in the east of the country to lift the closure.”

Libya, which before the shutdowns produced about 1.2 million barrels of oil a day, has been plunged into a deep political crisis over a dispute over the leadership of the Central Bank of Libya, the sole internationally recognized custodian of Libya’s oil revenues.

The internationally recognized government in the western capital, Tripoli, is seeking to replace Sadiq al-Kabir, governor of Libya's central bank. This has led to further disagreements between eastern and western governments and political factions, which once again threaten to reduce Libya's oil production and exports.

Last week, Libya's crude oil exports were estimated to have fallen to 400,000 barrels a day in September from 1 million barrels a day in August.