Unipec and Chinaoil, trading arms of China's largest oil companies Sinopec and PetroChina, have agreed to lift 100,000 and 40,000 barrels-per-day respectively, from Libya's state-owned National Oil Company (NOC). The two contracts, which were signed separately, will cover January-December supplies this year. While 140,000 bpd is a fairly modest amount in comparison to Libya's pre-war exports of around 1.77 million bpd, the increase shows the nation's refineries are slowly returning to normal.
The civil war in Libya disrupted Chinese supply lines and caused crude imports from the troubled nation to fall by around 100,000 bpd to 52,000 bpd. In 2010, fighting meant that exports were halted for six months, causing serious importing issues in China, which imports more than five million bpd from the OPEC country.
A return to form in Libya is also good news for the global oil market, as increased production will ease global supply concerns caused by recent EU sanctions on Iranian oil. Despite Societe Generale raising its forecasts for Brent crude to around $127 a barrel, it actually fell slightly below $125 a barrel in March, as fears over squeezed supply were eased.
Published 26th March, 2012
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