Libyan Oil Blockade Puts up to 0.7m b/d of Supply at Risk

A blockade by Libya’s Eastern-based government could remove 0.6m-0.7m b/d of oil from the global market, according to an assessment by Stratfor, cited by Bloomberg.

• The Benghazi based government which controls most of Libya’s oil fields said it was shutting all those under its control and "suspending all production and exports until further notice," the AFP reported.
• The source of the dispute is disagreement between the two competing factions over replacing the governor of the Central Bank of Libya.
• Libya is already grappling with a politically motivated shutdown of its Sharara oil field in the southwest which has shuttered 260k b/d of production. However, Sharara’s shut down is unrelated to the current dispute over the Central Bank.
• Looking at the impact on crude, Bloomberg noted that any Libya-driven rally could be short-lived. US consumer spending or payrolls data next week may offset the supply woes if it shows further sluggish movement on the demand side.