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Libya said it would resume full oil production from Thursday in a move that should return about 700,000 barrels a day of crude to the global market following the resolution of a dispute between rival political factions in the country.
Previous orders to halt operations have been lifted at “all Libyan crude oilfields and terminals”, said the National Oil Corporation in a statement on Thursday.
Libya normally pumps about 1.2mn barrels of crude a day but output has fallen to less than 450,000 b/d since the government in control of the east of the country shut down production and exports in August in a fight over control of the central bank.
The resumption of full production from Libya will help allay some of the concerns in the market over the potential for the escalating conflict in the Middle East to disrupt oil supply from Iran and other producers in the Gulf.
The reduced production had come amid a political stand-off between Tripoli-based Prime Minister Abdul Hamid Dbeibeh and the rival administration in the east dominated by warlord Khalifa Haftar.
Dbeibeh had pushed for the ousting of the governor of the Central Bank of Libya, which Haftar opposed, leading the eastern government to shut down large parts of the country’s production and exports.
The central bank holds billions of dollars in oil revenue, Libya’s only source of income.
The duelling administrations in late September agreed on the appointment of a new central bank governor, paving the way for the lifting of the blockade.