Libyan Oil Exports To Remain Below Pre-War Levels Until 2013

September 7, 2011Marketsby EW News Desk Team


The International Energy Agency (IEA) warned on Thursday that Libyan oil exports were unlikely to return to their pre-war levels until 2013, despite claims made by Oil and Finance Minister Ali Tarhouni that the oil industry would resume normal production within the next two weeks.

"Our experts think that 2013 or beyond will most probably show the complete full restoration of the Libyan supply to the market, but not before that," said IEA’s new executive director Maria van der Hoeven in an AFP interview.

Libya produced about 1.6 million barrels of oil per day before the rebellion broke out in mid-February. Since then, oil production has come to a grinding halt though many oil companies, particularly from Europe, are keen to restart production soon.

Related: The Mad Rush For Libyan Oil Profits Has Begun

According to Mr. Tarhouni, only 10 to 20 percent of Libyan oil installations had been damaged during the six-month uprising, mostly by vandalism and looting. Rebel leaders have also said that they would honour all existing contracts with foreign companies.

Although Mr. Tarhouni insisted to the Wall Street Journal that “overall the picture is really good”, Van der Hoeven cautioned that “"stabilising the political situation is the first thing that has to be done.”

In June this year, the IEA took the extraordinary step of having its members release their oil reserves to counter a surge in the price of crude. Van der Hoeven though have ruled out releasing their emergency oil reserves once in order to reduce prices. Instead, she insisted that any action would only be taken in the case of a supply disruption.

Related: OPEC Outrage at IEA’s Release of Oil Reserves

"You do it for the right reason, and the right reason is always to have a solution for a disruption of supply," said Van der Hoeven, as quoted by Reuters. "That's what it's intended to be."

Van der Hoeven, who has been in office for just a week (since September 1), has made it a priority for the IEA to repair its ties with OPEC and improve dialog with energy producers and non-IEA countries, particularly in emerging markets where fuel demand is growing.

In an interview with Bloomberg, she was quick to acknowledge the IEA’s flaws and appeared ready to address the various issues that her agency was bound to face.

When the IEA was started it really was a rich man’s club of oil-consuming countries of established, industrialized democracies,” she said. “It still is, but the world is changing. There will be new established and industrialized democracies in 10 years or more so you have to see to it that you have good open contacts with these countries.”

blog comments powered by Disqus