Libya Oil Exports 'May Be Frozen for Months'
Source: The Wall Street Journal, James Herron (3/15/11)
"Importers relatively relaxed now, but demand will spike in April."
"Exports could be off the market for many months due to both war-inflicted damage on oil infrastructure and international sanctions," the IEA said in its monthly oil market report.
The country's main export route, the Es Sider shipping terminal, has been shut down after a critical pipeline was bombed by government forces, the agency said. "In addition, tanker insurance fees to lift volumes are now prohibitive after the insurance market added Libya to its high-risk list of ports to avoid," it said.
Supplies have been rerouted from their usual export terminal at Ras Lanuf, which was recently retaken by forces loyal to Col. Moammar Gadhafi, to the undamaged port of Tobruk that remains in rebel hands, Mr. Bulifa was reported as saying. However, he told Reuters there are no plans to export any of this oil for the rest of March, but shipments could resume next month.
"Harsh reality now suggests either a prolonged civil war, or a resurgent Gadhafi regime that might reinstate control over production and export facilities, but with supplies to the global and European market limited by sanctions," the IEA said. Almost all international oil companies have stopped trading with the regime, it said.
Importers of Libyan crude have so far been "comparatively relaxed" about the situation there because many of them have shut down their refineries to perform annual maintenance. "Market insouciance may change abruptly as April approaches, when global crude demand is expected to increase by around one million barrels a day as Atlantic Basin refinery maintenance ends," the IEA said.