Remember the trading frenzy and sudden big jump in oil prices in 2011 when Libya was having the "crisis" what with the arab spring coming and all that Gaddafi hoohah? The country plunged into civil war and their production tanked from 1.6+million bpd to nothing. Things have since improved somewhat since then and Libya is now pumping around half million bpd a day. That's not much, but at least it's contributing to the excess in global oil supply.
Let's cast our eye on the bigger fish. OPEC led by Saudi Arabia has been on a pumping spree and with increased production looks like it is on track to finally beat the crap out of America's shale players.
However, the biggest thing to consider on the supply side would be IRAN.
The Iranian angle :
Exports of crude and condensates have been cut from 2.6 million bpd in 2011 to 1.4 million bpd in 2014, according to the U.S. Energy Information Administration. However Iran produced average of 3.6million bpd(barrels per day) last year (BP Statistical Review of World Energy 2015) and probably sold the excess via back channels to countries like Turkey and India which buy oil with gold. And back in 1974 before all the wars and sanctions they were doing 6million+bpd/day.
Just wait till the nuclear inspection thingie is done and Iran starts officially and properly exporting oil internationally again early next year and ramp up production. They are already inviting overseas majors to invest. They should easily hit around 4 million bpd if not more with plenty of untapped oil reserves and new investment coming in. Not to forget their natural gas reserves are humongous as well which will impact the LNG market prices and supply.
Iran's addition to the global oil supply glut will more than make up for any drop in Shale production from the Americans. "Barring any unforseen circumstances" , expect another race to the bottom for oil prices pretty soon.
[author is not vested in any stocks with any relation to O&G sector. Oh and also property sector.]
