Iran and Libya supply fortunes highlight market risks
The impact from Libya’s lost barrels versus the threats to Iranian supply highlight the type of buffer in the oil market and the demand implications
An Israeli attack on Iranian export facilities could mean the loss of around 1.5m bl of medium and heavy sour crude currently going mainly to China. These barrels will be hard to replace compared with Libyan oil, as global light sweet supplies remain abundant. OPEC+ could make up the loss but is unlikely to do so, as the group is interested in supporting prices. China’s inability to easily replace discounted Iranian barrels could also jeopardise its economic recovery. The oil market has demonstrated resilience this year, despite several supply disruptions. According to the US Energy Information Administration (EIA), an average of 1.1m b/d of production was offline in the first eight months
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