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OPEC and non-OPEC’s Joint Technical Committee has scheduled a meeting on the 4th and 5th of February in Vienna to assess the impact of China’s new coronavirus on oil demand. As oil continues to trade below $60 a barrel, Kola Karim, Chairman of Shoreline Group joins CNBC Africa to discuss what this means for Nigeria’s economy.</p>


Here’s how Coronavirus outbreak impacts oil markets and Nigerian economy


<ul><li>Saudi oil output edges lower</li><li>Nigeria cuts supply but still exceeds quota</li><li>Angolan output posts biggest rise after maintenance</li><li>Output by country, compliance:</li></ul>



<p>By Alex Lawler</p>



<p>LONDON, Jan 6 (Reuters) &#8211; OPEC oil output fell in December as Nigeria and Iraq adhered more closely to pledged reductions and top exporter Saudi Arabia made further cuts ahead of a new production-limiting accord, a Reuters survey found.</p>



<p>On average, the 14-member Organization of the Petroleum Exporting Countries pumped 29.50 million barrels per day (bpd) last month, according to the survey. That is down 50,000 bpd from November&#8217;s revised figure.</p>



<p>Crude prices have rallied to above $70 a barrel in 2020, extending a 23% gain in 2019, supported by ongoing OPEC-led curbs and increased Middle East tensions after the killing of a top Iranian general. This has increased concern of conflict that could further cut supply.</p>



<p>&#8220;Looking ahead, geopolitical risks will remain front and centre of investor concerns,&#8221; said Stephen Brennock of oil broker PVM.</p>



<p>&#8220;A tense waiting game has begun to see if the fallout will lead to a disruption in regional oil supplies.&#8221;</p>



<p>OPEC, Russia and other allies, known as OPEC+, had an agreement to reduce supply by 1.2 million bpd in 2019. OPEC&#8217;s share of the cut was about 800,000 bpd, to be made by 11 members, with exemptions for Iran, Libya and Venezuela.</p>



<p>At meetings in December, OPEC+ agreed to make an additional cut of 500,000 bpd as of Jan. 1, 2020.</p>



<p>The 11 OPEC members bound by the agreement easily exceeded the pledged cuts, thanks in large part to Saudi Arabia and its Gulf allies cutting more than called for to support the market.</p>



<p>The December survey suggests Nigeria and Iraq, both laggards in making cuts in 2019, achieved some progress. Compliance rose to 158% in December, the survey found, from 153% in November.</p>



<p>NIGERIAN DROP</p>



<p>OPEC&#8217;s largest production drop of 80,000 bpd was in Nigeria, which exported less crude according to ship-tracking data and loading schedules.</p>



<p>Much of this decline came from reduced shipments of Bonga crude, which traders say has been undergoing maintenance.</p>



<p>OPEC&#8217;s two top producers, Saudi Arabia and Iraq, each reduced output by 50,000 bpd. This puts Saudi supply more than 500,000 bpd below its 2019 target. Iraq&#8217;s compliance, at 59%, is far lower than Saudi Arabia&#8217;s but is up from 23% in November.</p>



<p>The United Arab Emirates made a further voluntary curb in December, while Kuwaiti output was steady.</p>



<p>Among countries pumping more, the largest increase was in Angola, which boosted exports after maintenance affecting the Girassol crude stream had curbed supplies.</p>



<p>Venezuela, which is contending with U.S. sanctions imposed on state oil firm PDVSA and a long-term decline in output, managed a small boost to supply with exports increasing in December.</p>



<p>Production from the other two exempt producers Libya and Iran edged lower.</p>



<p>The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data and information provided by sources at oil companies, OPEC and consultants.</p>



<p>(Additional reporting by Rania El Gamal; Editing by David Evans)</p>


OPEC oil output slips in December as Nigeria, Iraq comply more

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<p>Research institute, Moody’s, says Nigeria’s debt affordability will remain weak and the country’s revenue is expected to remain low at around 8 per cent of Gross domestic product (GDP) until 2022. Meanwhile, oil producer club, Organization of the Petroleum Exporting Countries (OPEC) and its allies have agreed to an additional 500,000 barrel supply cut beginning from the first of January. Victor Aluyi, Head of Portfolio Management at Comercio Partners joins CNBC Africa for more.</p>


Moody’s: Nigeria’s debt affordability will remain weak

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<p>The Organisation of Petroleum Exporting Countries (OPEC) has agreed to increase output curbs in early 2020. The agreement, which needs to be formally adopted later today, will cut an extra 500,000 barrels per day of production, through tighter compliance and some adjustments. Emmanuel Adeleke, Research Analyst at ARM Securities joins CNBC Africa for more.</p>


Oil market awaits ratification of OPEC and supply cut

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<p>In early morning trade brent crude declined slightly by 0.4 per cent as investors eagerly await the meeting of Organization of the Petroleum Exporting Countries (OPEC) next week. The meeting may result in the extension of an output agreement which cuts output by 1.2 million barrels per day.</p>


What to expect ahead of OPEC meeting next week

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<p>OPEC has revised its forecast for global oil demand downwards to 104.8 million barrels per day by 2024, citing tough market conditions and signs of stress in the world’s economy. CNBC&#8217;s Joumanna Bercetche caught up with OPEC’s Secretary-General, Mohammed Barkindo for more.</p>


OPEC lowers forecast for global oil demand

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<p>OPEC agreed to extend production cuts by nine months after several members endorsed the move aimed at supporting oil prices amid a weakening global economy. The deal will take effect once non-OPEC allies give their approval at a meeting scheduled to hold today. Oyeyemi Oke, Oil and Gas Lawyer and Partner at A02 Law joins CNBC Africa to discuss this and other stories impacting the global oil market.</p>


OPEC agrees to extend production cuts by nine months

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<p>The Organisation of the Petroleum Exporting Countries says it expects the oil market to tighten this year following a significant drop in its production output. Uchenna Minnis, Chief Market Analyst at Eagle Global Markets joins CNBC Africa to look at activities influencing the global oil market.</p>


Oil market to tighten this year – OPEC

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<p>Oil prices struck new 2019 highs on Tuesday, supported by supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela. Meanwhile, Producer group, OPEC has cancelled its April meeting leaving production cuts in place until June. Uchenna Minnis, Chief Market Analyst at Eagle Global Markets joins CNBC Africa to discuss trends shaping global oil prices.</p>


Trends shaping global oil prices


<p>By <a href="https://www.cnbc.com/natasha-turak/">Natasha Turak</a> <a href="https://twitter.com/NatashaTurak">@NATASHATURAK</a><a href="https://www.cnbc.com/holly-ellyatt/">&amp; Holly Ellyatt</a><a href="https://twitter.com/@HollyEllyatt">@HOLLYELLYATT</a></p>



<p>KEY POINTS</p>



<ul><li>OPEC listens to what the U.S. has to say when it comes to oil prices and production but “always does the right thing,” according to the United Arab Emirates’ energy minister.</li><li>“We’re not playing with President Trump or any other president.”</li></ul>



<p>The U.S.-China trade war and booming American shale production are among the top worries for the United Arab Emirates’ energy minister and former OPEC president. After a volatile year for oil prices, hydrocarbon-exporting countries are buckling down for what could be more turbulence ahead.</p>



<p>In terms of geopolitical headwinds for 2019, “One is the potential of heated war between China and the United States,” Suhail Al Mazrouei told CNBC’s Hadley Gamble on Wednesday. Mazrouei finished his term at the helm of OPEC on January 1.</p>



<p>“We’re not playing with President Trump or any other president,” he said.</p>



<p>I think this is one fundamental, not only affecting us but affecting the whole economics of the world. And I tend to be&#8230; more optimistic that we are not going to see a war. It’s negotiation tactics, they will end on a resolution, whatever it takes, this year or next year. ”</p>



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<p>While cautiously optimistic on the outcome of ongoing trade negotiations between the world’s two largest economies, Mazrouei stressed the impact of U.S. shale production on the market — something that’s increasingly putting OPEC members under pressure. “But this is one thing, how much is coming from the shale oil production I think that’s another factor we need to watch and we need to advise that it has to be reasonable,” the minister said.U.S. shale competition intensifying</p>



<p>Oil prices have plunged since reaching highs of more than $86 per barrel in early October over concerns of global oversupply and weakening demand. On Wednesday, benchmark Brent crude futures stood at $59.28 per barrel whereas West Texas Intermediate (WTI) futures were fetching $50.34 a barrel.</p>



<p>The U.S.-China trade war, political turmoil in Europe and fears of an impending slowdown in global economic growth have also seriously clouded the demand outlook.</p>



<p>And the Energy Information Agency has upgraded its supply growth outlook for American crude. U.S. domestic oil production is now expected to increase by 1.18 million bpd next year with output averaging 12.06 million bpd. That flood of fresh U.S. crude supply “will cement its newfound position as the world’s top oil producer,” according to consultancy firm PVM Oil Associates.No ‘political games’ with Trump</p>



<p>Asked about the growing criticisms of OPEC coming from the White House, Mazrouei maintained that OPEC listens to what the U.S. has to say when it comes to oil prices and production but insisted that the cartel “always does the right thing.”</p>



<p>“I think what we do is we hear them (the U.S.). They are major consumers versus the major producing nations, we hear what they say but we will always do the right thing from our perspective which is always trying to maintain the balance (in supply and demand).”</p>



<p>OPEC and its non-OPEC counterparts led by Russia agreed to a production cut of 1.2 million barrels per day in early December to put a floor under falling prices, despite Trump’s calls to keep the crude flowing. Crude prices dropped on the news that Washington would issue waivers to eight of the top importers of Iranian oil, allowing them to avoid U.S. sanctions on Iran for 180 days. OPEC members like Saudi Arabia had previously heeded Trump’s calls to increase their output to make up for what was expected to be a massive shortage in the market due to the sanctions.</p>



<p>“We are not in the business of trusting or not trusting presidents,” the minister said when asked if he could trust Trump. “We are in the business of watching the market and correcting it every time the geopolitics (are) a factor, affecting the market.”</p>



<p>Al Mazrouei’s comments follow a tumultuous 2018 for oil which was characterized by price fluctuations as OPEC and its non-OPEC allies, including Russia, vacillated between cutting and increasing their oil production in a bid to stabilize prices.</p>



<p>President Trump remained critical of OPEC’s strategy to restrict output, saying that prices were “too high.”</p>



<p><em>Correction: The story has been updated to reflect the correct title of UAE’s Energy Minister Suhail Al Mazrouei</em></p>



<p><em>This article first appeared on CNBC https://www.cnbc.com/2019/01/09/uae-oil-minister-on-president-donald-trump-and-opec.html and is republished with its permission<br></em></p>



<p><br></p>


These are the biggest concerns for OPEC’s outgoing  chief

<p>Natasha Turak</p>
<p>Source: <a href="https://www.cnbc.com/2018/12/18/libya-biggest-oil-field-is-being-held-hostage.html">Libya&#8217;s biggest oil field is being held hostage, but even that won&#8217;t boost prices</a></p>
<ul>
<li>The protest group, known as the Fezzan Rage Movement, shut down the El Sharara oil field in Libya&#8217;s impoverished southwest earlier this month with the help of security personnel the Petroleum Facilities Guard, a militia known for its clashes with the Islamic State.</li>
<li>The movement of tribesmen is demanding better services from the government, which it claims has marginalized those living in Libya&#8217;s south.</li>
<li>Oil prices have fallen some 30 percent since hitting year-highs in October on concerns of global oversupply and slowing demand growth.</li>
</ul>
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<p>Libya&#8217;s state-owned National Oil Corporation (NOC) declared force majeure on operations at its biggest oilfield late Monday night amid a stand-off with armed protesters, expecting a loss of 315,000 barrels per day (bpd) for the OPEC member.</p>
<p>The protest group, known as the Fezzan Rage Movement, shut down the El Sharara oil field in Libya&#8217;s impoverished southwest earlier this month with the help of security personnel the Petroleum Facilities Guard, a militia known for its clashes with the Islamic State. The movement of tribesmen is demanding better services, health sector support, monetary stimulus for the southern region and better protection from the government, which it claims has marginalized those living in Libya&#8217;s south.</p>
<p>But while oil prices saw a slight rebound of about 2 percent one week ago on news of the shutdown,<br />
crude output from the U.S. is so high<br />
 it&#8217;s practically drowned out what would otherwise be a notable disruption in the oil market. Brent crude was trading at 58.54 at 2 p.m. London time on Tuesday, down 1.8 percent on the previous day.</p>
<p>&#8220;In terms of the impact on prices, at present it is struggling to overturn the prevailing bearish bias,&#8221; Stephen Brennock of PVM Oil Associates told CNBC on Tuesday. However, he noted, &#8220;any further unexpected outages could inject some much needed bullish impetus into the oil complex.&#8221;</p>
<p>Oil prices have fallen some 30 percent since hitting year-highs in October on concerns of global oversupply and slowing demand growth. The Energy Information Agency (EIA) projects U.S. shale oil output to top 8 million bpd by the year&#8217;s end and<br />
average a record 12.06 million bpd<br />
 in 2019.</p>
<p>While the crisis does heighten geopolitical risk, said Ehsan Khoman, head of Middle East and North Africa research at MUFG, &#8220;markets remained focused on the more structural concerns that U.S. oil production growth is well north of, and expected to stay, above global demand growth heading into 2019.&#8221;</p>
<p>Libya&#8217;s NOC said that production at El Sharara will only restart after &#8220;alternative security arrangements,&#8221; the Monday statement said, without elaborating.</p>
<p>&#8216;Security backdrop remains tense&#8217;</p>
<p>The North African country of 6.4 million has been struggling to rebuild its energy industry since its 2011 revolution that ousted longtime leader Moammar Gadhafi and the ensuing collapse in central power.</p>
<p>Exempt from OPEC&#8217;s supply cut agreements due to its civil conflict,<br />
Libya was enjoying its highest output levels<br />
 in five years in the latter half of 2018. Production reached 1.28 million bpd as reported in November, up from roughly 500,000 bpd the previous June.</p>
<p>But the latest supply disruption shouldn&#8217;t come as a surprise, regional analysts say, citing the crisis as a timely reminder that this fragile recovery shouldn&#8217;t be taken for granted.</p>
<p>&#8220;The truth of the matter is that the security backdrop remains tense,&#8221; PVM&#8217;s Brennock said. Numerous armed factions still grapple for control and a cut of Libya&#8217;s oil wealth in an environment where the internationally recognized government in the country&#8217;s west is ignored by a separate, yet powerful, independent government in its east. In September, IS militants attacked the NOC headquarters in Tripoli, killing two people.</p>
<p>&#8220;Libya&#8217;s political landscape therefore remains deeply divided and the country continues to be a tinderbox for conflict,&#8221; Brennock continued. &#8220;This is hardly conducive for a sustained recovery in oil production. In short, Libya remains a hotspot of uncertainty and conditions are ripe for further disruptions.&#8221;</p>
<p>Earlier this month NOC warned of &#8220;devastating consequences&#8221; of a production shutdown to both the southern region and Libya&#8217;s economy as a whole, local newspaper the Libyan Observer reported. But it has thus far refused to pay a &#8220;ransom&#8221; to the protesters, saying it would set a dangerous precedent to Libya&#8217;s many other armed groups and endanger yet more oil production facilities.</p>
<p>&#8220;We have decided to close the oilfield in Ubari until our demands are materialized,&#8221; the Fezzan Rage Movement&#8217;s representatives said in a statement last week, referring to the area where the El Sharara field is located.</p>
<p>&#8220;If not, we will close El Feel oilfield as well. Our demands are on the tables of Libyan governments.&#8221; The nearby El Feel oilfield remains operational for now, with production of about 70,000 bpd.</p>
<p/>


Libya’s biggest oil field is being held hostage, but even that won’t boost prices

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<p>Africa Oil and Power week is billed as Africa’s Elite Energy Event, bringing together the continent’s top leaders in the petroleum and power sectors. This year’s event is underway in Cape Town, and earlier the secretary general of the Organization of Petroleum Exporting Countries, Mohamed Sanusi Barkindo spoke to the media about how OPEC has dealt with volatility on the market since the oil price crash and their strategy for the years to come.</p>


OPEC’s Mohamed Sanusi Barkindo on tackling market volatility in the oil sector

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<p>OPEC says oil demand growth is expected to slow down next year to 1.43 million dollars per day from a growth of 1.64 million barrels per day anticipated this year. Jubril Kareem, Oil &#038; Gas Analyst joins CNBC Africa to discuss the outlook for oil and the impact of the trade tensions on emerging markets.</p>


OPEC: Oil demand to slow down in 2019

<p>Global leaders in the oil and energy industry will highlight Africa Oil &amp; Power 2018 in Cape Town, including H.E. Mohammed Sanusi Barkindo, Secretary General of OPEC, Dr Sun Xiansheng, Secretary General of the International Energy Forum and H.E. Mahaman Laouan Gaya, Secretary General of the African Petroleum Producers’ Organization.</p>
<p>AOP, the continent’s leading platform for energy development and discussion, is returning to Cape Town for the third year, bringing together an elite cadre of government officials, private sector executives and industry experts to address the key issues in Africa’s oil and power sectors.</p>
<p>The theme for the conference — Energy Coalitions — will drive the conversation about the best way to drive Africa’s energy sectors forward. From regional cooperation at the government level and private companies coordinating on development and financing deals to how the private and public sectors can collaborate together, focusing on current and new partnerships will be the focus of AOP 2018.</p>
<p>With the importance of energy coalitions highlighting the conference, H.E. Mohammed Sanusi Barkindo will be bestowed with the “Africa Oil Man of the Year” award during the Energy Coalitions dinner.</p>
<p>The event has confirmed the participation of 15 African energy oil and ministers, including H.E. Jeff Radebe, Minister of Energy of the Republic of South Africa; Hon. Dr. Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources of Nigeria; H.E. Gabriel M. Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea; Hon. Ezekiel Lol Gatkuoth, Minister of Petroleum of South Sudan; H.E. Pascal Houangni Ambourouet, Minister of Petroleum and Hydrocarbons of Gabon; Hon. Boakye Kyeremateng Agyarko, Minister of Energy of Ghana; H.E. Abdirashid Mohamed Ahmed, Minister of Petroleum and Mineral Resources, Somalia; H.E. Ernest Gbwaboubou, Minister of Mines, Industry and technological Development of Cameroon; H.E. Foumakoye Gado, Minister of Petroleum, Niger; H.E. Jean Marc Thystere Tchicaya, Minister of Hydrocarbons, Republic of Congo; Hon. Charles Keter, Cabinet Secretary for Energy and Petroleum of Kenya; H.E. Mansour Elimane Kane, Minister of Oil and Energy of Senegal; H.E. Marc Dederiwe Albi-Bidamon, Minister of Mines and Energy of Togo and Hon. Dona Jean-Claude Houssou, Minister of Energy, Water; Mines of Benin and  Hon. Dr. Dhieu Mathok Diing Wol, Minister of Energy and Dams of the Republic of South Sudan.</p>
<p>The third annual AOP flagship conference, held at the Cape Town International Convention Centre, will feature an engaging three-day program with panels on upstream development, the status of mega projects in Africa, trading and finance.</p>
<p>New additions this year will also include a full day dedicated to the power sector, including looking at the role of gas in Africa’s power sector, renewables and the promise of regional power pools; a focus on what national oil companies are doing in Africa; country pavilions and an exhibition hall. For more information and to participate, go to: <a href="https://africaoilandpower.com/event/aop-2018/">https://africaoilandpower.com/event/aop-2018/</a></p>
<p>&nbsp;</p>


Africa Oil & Power returns to Cape Town connecting the continent’s top leaders

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<p>Ahead of today&#8217;s OPEC meeting, CNBC caught up with Mohammed Barkindo Secretary-General of the Organisation of the Petroleum Exporting Countries, to get some insight on how the meeting is shaping up.</p>


Mohammed Barkindo optimistic ahead of OPEC meeting

<p>Justina Crabtree</p>
<p>Source: <a href="http://https://www.cnbc.com/2018/04/19/nigeria-president-buhari-hints-at-15-billion-shell-deal.html">Nigeria&#8217;s Buhari hints at $15 billion deal with Shell, says &#8216;we are not doing too badly&#8217;</a></p>
<ul>
<li>Nigeria&#8217;s President Muhammadu Buhari met with Shell on Wednesday as part of talks that could lead to a $15 billion investment in his country.</li>
<li>Oil accounts for approximately 35 percent of Nigeria&#8217;s gross domestic product, according to OPEC.</li>
</ul>
<p><img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2018/04/19/105143037-GettyImages-948149624.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="Daniel Leal | Olivas-WPA Pool | Getty Images"/></p>
<p>Nigerian President <strong>Muhammadu Buhari</strong> met with Shell<strong>RDSA-GB</strong> on Wednesday as part of talks he said were to secure $15 billion of investment in his country.</p>
<p>&#8220;I saw Shell Group, they came here, they saw me, they are preparing to invest $15 billion in Nigeria… so really, we are not doing too badly,&#8221; Buhari said to applause at the Commonwealth Business Forum in London on Wednesday. He was speaking as part of a panel on the ease of doing business between Commonwealth countries.</p>
<p>Shell confirmed to CNBC that the meeting had taken place, but did not comment on the size of the specific investment.</p>
<p>A spokesperson said in a statement: &#8220;Nigeria is an important country for Shell. We see good opportunities there for potential investment,&#8221; referencing its Bonga offshore oil field and the expansion of liquefied natural gas as examples of this. &#8220;Both projects are subject to a future final investment decision and we continue to work with our partners and the government towards that in each case.&#8221;</p>
<p>Shell&#8217;s statement added: &#8220;The potential investments feature as options in our long-term plans and would fit within our capital spending range of $25 to $30 billion per year if we decide to go ahead with them.&#8221;</p>
<p>Oil price volatility has hit Nigeria&#8217;s economy — the largest on the African continent — hard. In 2016, the country suffered its first full-year recession in 25 years. Economic growth remains sluggish, expected by the <a href="http://www.cnbc.com/id/10000936?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="><br />
<strong>International Monetary Fund</strong><br />
</a> (IMF) to be 2.1 percent for 2018, well below the emerging market average of 4.9 percent.</p>
<p>Oil accounts for approximately 35 percent of Nigeria&#8217;s gross domestic product, according to the <a href="http://www.cnbc.com/id/10000937?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="><br />
<strong>Organization of the Petroleum Exporting Countries</strong><br />
</a> (OPEC), of which Nigeria is a member.</p>
<p>Buhari referenced that, as of October, Nigeria had risen 24 places in the World Bank&#8217;s Ease of Doing Business ranking to 145th out of a total of 190 economies.</p>
<p>&#8220;We acknowledge that much more is to be done,&#8221; he said. &#8220;We are now in the next stage, this is work in progress.&#8221;</p>


Nigeria’s Buhari hints at $15 billion deal with Shell, says ‘we are not doing too badly’

<p>Natasha Turak</p>
<p>Source: <a href="http://https://www.cnbc.com/2018/04/18/libyas-most-powerful-military-leader-khalifa-haftar-might-be-dead.html">Libya’s most powerful military leader might be dead and that could impact oil markets</a></p>
<ul>
<li class="">Libya&#8217;s most powerful military leader reportedly suffered a stroke this week — and no one can confirm whether he is dead or alive.</li>
<li>Local media has reported General Khalifa Haftar&#8217;s death, while sources close to him insist he is recovering.</li>
<li>Haftar&#8217;s death could mean a renewal of violence that could hit the OPEC country&#8217;s oil output and create new opportunities for groups like ISIS.</li>
</ul>
<p><img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2014/05/26/101705002-491933959.1910x1000.jpg" alt="" height="1000" width="1910" data-licensor-name="AFP | Getty Images"/></p>
<p>Libya&#8217;s most powerful military leader reportedly suffered a stroke this week — and no one can confirm whether he is dead or alive.</p>
<p>Local media has reported General Khalifa Haftar&#8217;s death, while sources close to him insist he is recovering. If the former is true, it could mean a renewal of violence and a power struggle that could hit the OPEC country&#8217;s oil output and create new opportunities for extremist groups like the Islamic State militant group.</p>
<p>Often described as the oil-rich state&#8217;s &#8220;most powerful warlord,&#8221; Khaftar, who heads the powerful but internally fractured Libyan National Army (LNA), has been a stabilizing force in a country wracked by civil war since longtime leader Muammar Gaddafi was deposed in the Arab Spring uprisings of 2011. Many fear that his absence could usher in the kind of power vacuum and chaos that followed Gaddafi&#8217;s death.</p>
<p>Haftar effectively controls eastern Libya, including the &#8220;oil crescent&#8221; in the Gulf of Sirte that holds four major ports that comprise the lion&#8217;s share of Libya&#8217;s oil exports. The 75-year-old general, who holds American citizenship, was formerly a Gaddafi ally but returned to Libya in 2011, after years in the U.S., to join the NATO offensive that toppled the dictator.</p>
<h4>A fractured country</h4>
<p>Haftar has successfully managed to hold numerous competing factions and tribes together to keep the LNA unified. And he&#8217;s effectively presented himself as an answer to radical Islamist groups in the region, thereby gaining strong support from Egypt and the United Arab Emirates (UAE).</p>
<p>Eastern Libya is home to its Tobruk-led government, which is in competition with the internationally-recognized Government of National Accord (GNA), based in the capital of Tripoli in western Libya. Haftar&#8217;s eastern camp is supported by Egypt and the UAE. Technically, the two bodies are supposed to be united under the GNA, but they do not fully recognize one another and thus make their own laws regardless of joint consensus. Welcome to Libya. </p>
<p><img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2014/10/15/102090359-1179019.1910x1000.jpg" alt="Libya map" height="1000" width="1910" data-licensor-name="AP"/></p>
<p>Exports from the four ports under Haftar&#8217;s control are Libya&#8217;s main source of much-needed hard currency. Libya&#8217;s population of 6.3 million sits above the largest proven oil reserves in Africa, but benefit practically nothing from them — the United Nations estimates about 40 percent of the country lives below the poverty line.</p>
<p>Because he&#8217;s so revered in eastern Libya, any potential successor to Haftar would likely face serious challenges from within the LNA, and his death could trigger deep internal conflict, said Sarah Al Shaalan, a Middle East and North Africa researcher at risk consultancy Eurasia Group. Egypt and the UAE appear committed to preventing a splintering of the east, but a worst-case scenario would be the outbreak of further violence.</p>
<h4>Risk to oil production</h4>
<p>Haftar&#8217;s incapacitation will have direct implications for the hydrocarbon sector, according to Chris Elsner and Paul Tossetti of IHS Oil Markets.</p>
<p>The general&#8217;s efforts were vital in maintaining much of Libya&#8217;s oil production. It took Haftar&#8217;s concentration of power in the east, aided by his military forces, to open up all Libya&#8217;s central export terminals, &#8220;marking the start of the most recent rise in Libyan output back to 1 million barrels per day (bdp) from a range of 300,000 to 500,000 bpd,&#8221; the analysts said.</p>
<p>&#8220;That resurgence — and the associated revenues — have bought a measure of temporary stability for Libya and provided some scope for political negotiations to move forward,&#8221; they added.</p>
<p>So increasing chaos would only further damage Libyan national security, creating opportunities for militias and traffickers already exploiting the crisis, Al Shaalan said. &#8220;The Islamic State would also likely exploit the situation to accelerate attacks intended to disturb oil exports in north-central Libya.&#8221;</p>
<p>And a weakened LNA would encourage its opponents to recapture main positions like oil terminals or military sites.</p>
<p><img loading="lazy" decoding="async" src="https://media.cnbc.com/i/applications/cnbc.com/resources/img/editorial/2017/08/07/104638259-GettyImages-605720592.1910x1000.jpg" alt="A picture shows a general view at the Zueitina oil terminal in Libya on September 14, 2016." height="1000" width="1910" data-licensor-name="Abdullah Doma | AFP | Getty Images "/></p>
<p>For rival forces waiting for the news on Haftar, this may be their window, and the country could witness a rush to target oil infrastructure and disrupt operations in the event of his death. Eurasia Group estimates this would lead to a decline in average production in Libya from 1.1 million bpd in 2018 to roughly 900,000 &#8220;in the most benign scenarios.&#8221;</p>
<p>Markets will focus not only on potential declines, but on the risk of much broader instability in the east that would have a more meaningful impact on production.</p>
<p>Given tightening global oil supplies, a 200,000 bpd decrease in Libya would add further support to oil prices, and combined with the increased likelihood of a <a href="http://www.cnbc.com/id/104955107?__source=cnbcafrica|inline|story|&amp;par=cnbcafrica &amp;doc="><br />
<strong>collapse in the Iran nuclear deal</strong><br />
</a> in May, bolsters the case for oil market bulls.</p>
<p>In the meantime, Libyans await news on the fate of one of their most influential leaders — and by extension, the fate of their country.</p>


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