Energy This Week: Libya oil on or off?, Iraq seeks gas boost, & decarbonised industry needs funding
Libya oil – on or off after Central Bank takeover?
The takeover of the Libyan Central Bank by the western government based in Tripoli has reopened political divisions with the east – and led to a prompt shutdown of the country’s oil production. Force majeure was declared on the El Feel field, one of Libya’s biggest, on Monday. Some international players, such as the US, will want a quick resolution, but a more durable solution to Libya’s disputes remains far off. European refineries will have to seek alternative supplies to their preferred light crude from Libya, with West Africa and the US as the probable replacements.
But despite Libya’s travails, and positive US economic data, oil finished down last week and took a sharp tumble on Tuesday, with Brent crude falling below $74 per barrel. The expectation of easing Opec+ cuts seemed to outweigh the Libyan disruption, with reports on Tuesday that a deal to resume production was near, based on comments from the ousted Central Bank governor. More than half of production, 700,000 barrels per day, had been reported offline on Thursday.
Opec secretary general Haitham Al Ghais visited Iraq, and the organisation expressed confidence that Iraq would abide by its commitment to compensate for past overproduction. Meanwhile, the US economy grew 3 per cent in the second quarter, above an initial estimate of 2.8 per cent, as consumer spending was strong.
Lower oil prices will also see UAE fuel prices drop in September, with petrol down about 5 per cent and diesel falling 5.8 per cent.
Oil tanker tow could prevent Red Sea oil spill
The oil tanker, MV Sounion, damaged by a Houthi attack on August 21, will be towed away, in a bid to avoid a serious oil spill. But the group hit a container ship in the Gulf of Aden on Saturday. Houthi attacks have escalated, with several oil tankers targeted, a move they say is designed to put pressure on Israel for a ceasefire in Gaza.
Egypt’s economic troubles have been worsened by declining oil and gas output. Now its petroleum minister has announced incentives to grow exploration and production, including efforts to pay overdue bills to oil and gas companies.
Lebanon won’t be able to use a fuel oil donation from Algeria immediately, despite its desperate electricity crisis. Two mothballed power plants that could burn the fuel are only scheduled to be reactivated in November. However, some fuel oil has arrived from Egypt and should be unloaded shortly, increasing the electricity supply by four to six hours a day for 15 days.
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Iraq seeks to boost gas on US visit
Iraq’s Oil Minister plans to visit the US soon and intends to offer about 10 exploration blocks for gas to US companies.
QatarEnergy will build a new plant that will more than double Qatar’s output of urea, a crucial fertiliser made from gas. Energy Minister and QatarEnergy chief executive Saad Al Kaabi said the project would make the country the world’s biggest urea producer.
Accelerating decarbonised industry needs funding now
There are “headwinds and tailwinds” in the decarbonising industry, says Faustine Delasalle, head of the Industrial Transition Accelerator, which was set up at Cop28 in Dubai last year. Funding for new low-carbon industrial centres is needed “in the next couple of years”.
One vital and tricky business to be decarbonised is aviation – and the chief executive of Abu Dhabi-based clean energy company Masdar says there is a “compelling case” to use hydrogen. The EU-mandated quantity of synthetic hydrogen-based aviation fuels is “ginormous”, said Mohammad Abdelqader El-Ramahi. The Gulf is a “sweet spot” for carbon capture, says Hernan Silva, Adnoc vice-president for carbon capture and storage.
UAE-based start-up Sparklo offers rewards for depositing recyclable materials, such as plastic bottles, helping to promote the circular economy. Its reverse vending machines use AI to recognise the items.
Dubai Police have introduced another electric vehicle to their fleet, the Zeekr 001, which can do zero to 100kmph in 3.8 seconds and has a range of 580km per charge. Other electric cars it has include the Hongqi E-HS9, its first, acquired in October 2022, and the Lotus Eletre R, an all-electric SUV.
Gulf corals bleached – but is relief in sight for this summer?
Corals in the Gulf and off Oman may have “dodged a bullet” but still saw serious bleaching last month because of high temperatures. When seawater gets too hot, corals expel the symbiotic algae that give them their colours and also food. The Gulf’s corals are unusually resistant to high temperatures, but even they have suffered in recent heatwaves.
New technologies are helping farmers cope with climate change and the high temperatures in the Gulf, including heat-absorbing films for greenhouses, and optimising conditions with AI.