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Libya’s Sharara crude oil sees first scheduled exports in three months: sources

The first export cargoes of Libya’s Sharara crude since the lifting of force majeure will be lifted this weekend, according to trading sources and shipping reports.

The Aframax vessel Balla has been fixed by Austrian refiner OMV for a voyage from the western Libyan port of Zawiya to a Mediterranean destination for March 9 at Worldscale 112.5, according to shipping reports. A second Aframax stem, for loading March 9-11, is also being sought by OMV from Zawiya. A representative of OMV declined to comment on the fixtures.

Libya’s National Oil Corporation on Monday lifted force majeure on operations at the grade’s field after almost three months following the removal of an armed group that had occupied the site. The 300,000 b/d Sharara field has been shuttered since December 8 after armed groups, with the help of local people, occupied the site in protest at economic conditions and frequent power outages in the south of the country.

Trading sources said the field is quickly ramping up production for exports over the course of this week. “NOC started at up to 80,000 b/d [on Tuesday]…we understand they should reach 300,000 b/d or slightly less by early next week, so we will see roughly that amount more on the market from [March 10],” a trading source said.

All together, at least seven cargoes of Sharara are estimated to load before the end of March, according to multiple trading sources, with the additional volume likely to have a bearish effect on similar light sweet grades in the Mediterranean such as Kazakhstan’s CPC Blend and Algeria’s Saharan Blend.

On the shipping side, previously there have been additional costs for ships to call on Libyan ports, due to civil unrest in the country. The port of Zawiya has higher port costs of approximately $75,000, compared with around $35,000 for the Eastern Libyan port of Es Sider. This can make cargoes loading here more expensive depending on the discharge port, but according to shipping sources, there is no additional premium for loading out of ports in Western Libya and recently these routes have largely seen costs normalize compared to other North African ports.

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