Reports indicate that the newly appointed Prime Minister of Libya, Fathi Bashagha, is threatening to shut down oil sites in eastern Libya if the government of Abdulhamid Dbeibah does not relinquish power.
That’s what Dryad Global’s latest Maritime Security Threat Advisory (MSTA) said, adding that the escalation carries the risk of a new oil crisis in Libya, “which could lead to significant disruption of the world oil market and exacerbate Libya’s political instability.”
“Meanwhile, the port of Derna reopened after a 10-year closure, providing a much-needed economic boost to the city of Derna,” Dryad noted to the MSTA.
“The first ship, the Mohammed S, docked on June 24, 2023, carrying food and medical supplies,” the company added.
At the MSTA, Dryad warned that, “given the political deadlock and its potential effects on oil production, maritime operators should closely monitor developments in Libya, despite positive developments in Derna.”
Dryad’s latest MSTA gives Libya a “severe” risk and impact rating. Most of the country’s ports featured in the MSTA have a “moderate” risk and impact rating. Libya’s risk and impact rating was also classified as “severe” in Dryad’s previous MSTA, which was released on June 20.
Countries with the highest risk rating in Dryad’s latest MSTA include Ukraine, Yemen and Syria, all designated “critical.”
As of 2021, Libya’s crude oil production was 1.2 million barrels per day and its marketed natural gas production stood at 24.24 billion cubic meters, according to the OPEC website. The country’s crude oil exports stood at 1.09 million barrels per day and its natural gas exports stood at eight billion cubic meters in 2021, the OPEC site shows.
Libya had proven crude oil reserves of 48.36 billion barrels and proven natural gas reserves of 1.5 trillion cubic meters in 2021, according to the OPEC site. The country joined OPEC in 1962.
“Apart from oil, Libya’s other natural resources are natural gas and gypsum,” the OPEC website states.
“Its economy depends mainly on the oil sector. Substantial income from the energy sector, together with a small population, gives Libya one of the highest GDP per capita in Africa,” he adds.
Black Sea
In its latest MSTA, Dryad also noted that the Black Sea region faces a “significant threat from mines dislodged by the collapse of Ukraine’s Kakhovka Dam.”
“These butterfly mines could reach Black Sea beaches, posing a danger to residents and tourists. The UN is working to locate and remove these mines,” Dryad told the MSTA.
“These developments require close monitoring by commercial maritime operators due to their potential impact on regional maritime operations and security,” the company added.
In its previous MSTA, Dryad stated that Russian officials had “doubled down on their threats to end their participation in the UN-backed grain deal beyond July 17.”
“Notably, Russian officials have repeatedly tried to use brinkmanship in an attempt to force concessions. So far, however, Russia appears to have assessed that its immediate interests remain part of the deal,” Dryad added to the MSTA.
Earlier this year, Dryad Global Analyst Krisztina Kocsis told Rigzone that: if the Black Sea Grains Agreement is suspended, it is unlikely that dramatic immediate consequences would be felt..
The analyst added at the time, however, that since this is an agreement that aims to maintain a level of cooperation and provide a channel of communication and negotiation between the conflicting parties, its suspension would mean an overall increase in uncertainty on the operating conditions of the Black Sea and would create a state of commercial volatility.
Kocsis also noted at the time that the suspension “would be detrimental to the entire conflict if this opportunity for negotiation is lost.”
“The immediate effects would be felt in Ukrainian waters while the rest of the Black Sea would continue to operate uninterrupted, albeit against the increased threat of sea mines,” Kocsis added.
In a statement published on the United Nations website on June 20, Farhan Haq, deputy spokesman for the secretary-general, said: “The secretary-general calls on the parties to accelerate operations and urges them to do everything possible to ensure – the continuity of this vital agreement, which is renewed on July 17”.
“The United Nations is fully committed to supporting the implementation of both the Black Sea Initiative and the Memorandum of Understanding on Russian Food and Fertilizer Exports because food and fertilizer exports, including ammonia, from the Russian Federation and Ukraine to reach markets around the world in a safe and predictable manner,” Haq added in the statement.
To contact the author, please send an email andreas.exarcheas@rigzone.com
