Global benchmark Brent crude surged to nearly $120 a barrel on Thursday before retreating a bit.
Production was halted at Libya’s biggest oil field and protesters threatened to keep a key export terminal closed, as the OPEC nation plunged deeper into political crisis.
The Sharara field, which produces 290,000 barrels a day, was closed Thursday after an unknown group shut down one of its main valves, according to people familiar with the situation. They asked not to be identified as they weren’t authorized to speak to the media.
The shutdown occurs as the North African nation, which has been mired in conflict following the 2011 ouster of Moammar Al Qaddafi, once again risks division. Parliament on Thursday swore in a new government to replace Prime Minister Abdul Hamid Dbeibah’s administration, escalating a standoff that risks reigniting fighting.
It also takes place against a backdrop of soaring oil prices following Russia’s invasion Ukraine and subsequent international sanctions. Global benchmark Brent crude surged to nearly $120 a barrel on Thursday, before slipping to trade around $113 by 4:22 p.m. London time. Futures are near their highest level since 2014.
Six of Libya’s oil terminals were closed earlier in the day until Saturday due to what the National Oil Corp. said was bad weather. The energy minister, who has been at odds with the NOC over the past year, said the step was unwarranted and a “violation of national security.”
Protesters at Zuetina port, one of the terminals the NOC said was shut, are vowing to keep it closed until their demands for better payment are met, according to people familiar with the matter.
Libya has Africa’s biggest oil reserves, and energy production has often been at the heart of the political conflict, with armed groups or protesters periodically shutting down facilities to press demands.
(Updates with context on oil prices in fourth paragraph.)