By Adedapo Adesanya
Oil prices climbed higher by about 3 per cent on Wednesday after a disruption at Libya’s top oilfield added to fears that mounting tensions in the Middle East could disrupt global supplies.
The Brent crude grade of oil rose by $2.36 or 3.1 per cent during the session to settle at $78.25 a barrel and the US West Texas Intermediate (WTI) crude increased by $2.32 or 3.3 per cent to $72.70 per barrel.
Libya’s National Oil Company on Wednesday confirmed the shutdown of one of Libya’s most important oil fields, the Shahara field.
Protestors took to the field yesterday morning, stating that the field would not be re-opened until their demands and those of the entire region of Fezzan in Southern Libya would be met.
Fears are that the protests may spread to the nearby 60,000 barrels per day El Feel field.
The 300,000 barrels per day Sharara field saw a short disruption for the last time in July of 2023 when protests erupted following the arrest of an official who tried to become the boss of Libya’s central bank.
Oil prices also climbed after Israel intensified its bombing of the Gaza Strip after its war with the Iran-backed Palestinian Hamas group stretched into Lebanon with the killing of Hamas’ deputy leader.
In a related development, the Houthis in Yemen, continued to attack vessels, prompting concerns that a wider Middle East conflict could develop and close crucial oil transport waterways like the Red Sea and Persian Gulf.
Also, the Organisation of the Petroleum Exporting Countries (OPEC) said cooperation and dialogue within the wider OPEC+ oil producer alliance will continue after Angola last month announced it would leave the group due to unsatisfactory production quotas.
OPEC+, which includes OPEC and allies like Russia, said it plans a February 1 meeting to review implementation of its latest oil output cut.
There have been worries about cohesion in the group following four exits in six years.
The American Petroleum Institute (API), an industry group, and the US Energy Information Administration (EIA) will release their oil inventory reports one day later than usual due to the New Year holiday.
