Oil prices nudged up on Friday with global supply concerns triggered by Libya oil field shutdown and coupled with reports of planned Iraqi production cuts.
International benchmark Brent crude increased 0.43% to $79.16 per barrel at 09.27 a.m. local time (0627 GMT), up from the previous session’s close of $78.82
US benchmark West Texas Intermediate (WTI) rose by 0.37% to $76.19 per barrel, after closing at $75.91 in the prior session.
Concern over potential supply shortages due to the suspension of oil production in Libya supported upward price movements.
Libya’s National Oil Corp. said Thursday that the losses incurred due to a decision by the eastern government to shut down oil and gas operations in the country have exceeded $120 million over the course of three days.
In a statement, the corporation, which controls the country’s oil resources, noted a decline in oil production rates from nearly 1,3 million barrels per day on Monday (the day the shutdown began) to 591,024 barrels on Wednesday.
On Monday, the government appointed by the House of Representatives in the east, led by Osama Hamad, declared a state of ‘force majeure’ on the entire oil sector and halted production and exports from oil fields and ports in response to the ‘storming’ of the Central Bank of Libya’s headquarters in the capital, Tripoli, by a committee tasked with transferring management from the current governor, Al-Siddiq Al-Kabir, to a new administration.
Libya, one of the major members of the Organization of the Petroleum Exporting Countries (OPEC) group, produced 1.18 million barrels of crude oil per day in July.
Oil prices jumped over 1% on Thursday after it was reported that Iraq planned to reduce its oil production in September as part of a plan with the Organization of Petroleum Exporting Countries.
Iraq will cut output to between 3.85 million and 3.9 million barrels per day, after producing about 4.25 million bpd in July.
Meanwhile, The UN on Thursday welcomed reports of rescue operations for the Greek-flagged oil tanker MV Sounion in the Red Sea after Yemen’s Houthi group agreed to allow access to the damaged vessel.
‘We are encouraged by reports that the salvage operations for the tanker can proceed with tugboats and rescue ships to access the incident areas,’ UN spokesman Stephane Dujarric told reporters during a news conference.
The tanker, which has been anchored in Red Sea waters, had its crew evacuated due to fires reported on board.
The Red Sea is one of the world’s most frequently used sea routes for oil and fuel shipments.
The Houthis have been targeting Israeli-linked cargo ships in the Red Sea and Gulf of Aden in solidarity with the Gaza Strip, which has been under an Israeli onslaught since Oct. 7 last year.
