Libya’s Oil Security Concerns Increase Freight Premiums
Libya’s Oil Security Concerns Increase Freight Premiums

Libya’s Oil Security Concerns Increase Freight Premiums

Libya’s Oil Security Concerns Increase Freight Premiums

Persistent security concerns over Libya’s oil export capacity and political divisions in the country fetch large tanker freight premiums for ship-owners daring to call at Libyan ports for crude oil loadings, shipbroker and ship-owner sources told Platts on Friday.
Earlier this week, Libya’s crude oil production exceeded 1 million barrels per day for the first time since June, when port blockades and a kidnapping caused production outages that within a month brought production down to 670,000 bpd.
Despite the production recovery, fresh protests at the oil terminal and refinery servicing the country’s largest oilfield, Sharara, threaten to shut down production again, with sources telling Platts they expect a complete shutdown of the field.
Amid the volatile security situation, with militias fighting at ports and oil export disruptions, many ship-owners shun transportation of Libyan oil cargoes. This in turn raises the premiums of freights on Libyan routes by up to 10 points on the so-called Worldscale—used to calculate freight rates for oil tankers—compared to freight rates on cargoes in the Mediterranean that don’t involve Libyan routes, sources told Platts.


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